China and India Lead the Way in Dynamic Growth of Asia's Insurance Markets, Reveals New Swiss Re sigma study.

Business Editors

ZURICH, Switzerland--(BUSINESS WIRE)--Aug. 28, 2001

Swiss Re's latest sigma study, "Insurance markets in Asia: sanguine outlook despite short-term uncertainties", outlines current and future trends in Asia's USD 600 billion insurance market. The study concludes that prospects for the life insurance industry are particularly positive.

Among the key findings:

-- China and India dynamically driving regional growth

-- deregulation opening up the market

-- cheaper and more effective distribution channels, and

-- ongoing industry consolidation.

Asia's insurance markets have bounced back from the slump following the Asian financial crisis, with non-life and life insurance businesses, excluding Japan, expected to grow annually by 7.9% and 8.9%, in real terms, from 2001 to 2005. The boost from further economic development - underpinned by sounder fundamentals - will ensure that the region remains one of the fastest growing insurance markets in the world. However, Japan will continue to lag behind with annual growth of only 1.9% in non-life and 2.3% in life.

Globalisation and other associated trends (chart available on Swiss Re's website wwww.swissre.com) are bringing about an irreversible transformation of the Asian insurance marketplace. This process has been expedited by the soothing impact of the Asian financial crisis on reform resistance and its contribution towards the acceleration of change:

-- The globalisation of Asia's insurance markets is set to gather

steam, particularly on the back of the gradual opening up of

the two most important future growth markets - China and

India.

-- Deregulation has gained widespread acceptance in Asia,

resulting in a pronounced shift towards solvency-based

supervision. Looking ahead, greater differentiation among

insurers, a squeeze on margins and more volatile underwriting

results are expected. This will ultimately lead to more

emphasis on capital productivity.

-- Insurers will intensify their quest for more cost-efficient

distribution channels. Aided by the scrapping of regulatory

obstacles, bancassurance is likely to gain prominence.

Internet distribution will continue to be explored, but the

focus is expected to be on the enhancement rather than on the

disintermediation of traditional agency channels.

-- Consolidation will continue to characterise most insurance

marketplaces, but regional differences in terms of the pace

and rationale for consolidation will become more pronounced.

Along with the unfolding of these industry-shaping trends, life insurance business is expected to derive additional impetus from a number of specific factors:

-- Asia's high savings rates and policyholders' increasing

willingness to take on investment risks offer attractive asset

management opportunities to insurers.

-- The region's rapidly ageing population signals the need for

governments to provide sufficient retirement provisions. Most

Asian governments are looking to the private sector to take a

leading role in meeting this challenge.

-- Bancassurance is helping life insurers to better segment

clients and access high net-worth sectors. Based on this

innovative approach to distribution, life insurance

penetration is set to increase, particularly in China and

India, where banks boast far-flung distribution networks.

How to access sigma:

The English, German, French, Spanish and Italian versions of the sigma study are available electronically on Swiss Re's website: http://www.swissre.com.

Printed studies: sigma No. 4/2001 can now be ordered. English and German versions are now available, those in French, Spanish, Italian, Chinese and Japanese will be available soon. Please send your order, including your full postal address, to:

E-mail:      [e-mail]
Zurich:      tel. [phone],     fax [phone]
New York:    tel. [phone],    fax [phone]
Hong Kong:   tel. [phone],    fax [phone]

This press release is also distributed by e-mail. To receive a copy, please contact [e-mail]

Swiss Re is one of the world's leading reinsurers with over 70 offices in more than 30 countries. In the 2000 financial year, gross premium volume amounted to CHF 26.1 billion (USD 15.4 billion) and the net income after tax reached CHF 3.0 billion (USD 1.8 billion). Swiss Re is rated "AAA" by Standard & Poor's, "Aaa" by Moody's and "A++" (superior) by A.M. Best.