High rates help increase investment returns and improve the risk-return ratio. However, changes in the monetary policies of major central banks lead to fluctuations in exchange rates and more costly hedging (especially for Japan and Taiwan). Meanwhile, the policy of the Central Bank of New Zealand reduces the profitability of savings products of insurers in this country.
Hong Kong
Premium growth will be moderate due to continued demand for savings policies from customers in mainland China. This will be facilitated by the difference in interest rates between Hong Kong and China.
Japan
Business profitability will be stable in fiscal 2024 (year ends March 2025). Interest margins will continue to expand, while the cost of hedging foreign currency investments will put pressure on earnings.
South Korea
Profitability will slightly improve in 2024, and high domestic interest rates will support investment returns and reduce the burden of creating reserves. Premium growth will remain low given high penetration levels. Life insurers will focus on selling term insurance policies rather than annuities.
Malaysia
Robust economic growth conditions in Malaysia and rising health and financial awareness should support premium growth in 2024.
New Zealand
Profitability will improve in 2024 thanks to continued increases in premium rates. Analysts predict an increase in visits to psychiatrists due to difficult conditions in the labor market.
Photos are from open sources.
