South Korea: Local insurers to play bigger role in corporate plans
Source: Asia Insurance Review | Mar 2018
The domestic insurance market is expected to continue to play an increasingly important role in large corporate insurance programmes, says Aon in its annual Asia Market Review.
In 2017, though the market was largely stagnant, there was more and more domestic capacity utilised on large and complex Korean risks as the market matured.
Aon said: “As the domestic market writes more business, we also expect to see Korean insurers increasing their retention levels and utilising local reinsurance capacity, rather than ceding to the international market. As buyers and the market continues to mature, we will see a move towards the model of creating long-term, strategic tripartite relationships between the insured, insurers, and brokers.”
“In 2018, we expect the value of these strategic partnerships and the evidence of client commitment to risk management and the clear articulation of this to the market to become increasingly evident.”
2017 was another year where Korean businesses continued to bring their risk management and transfer culture and strategies into line with what is generally accepted as global best practice. Whilst clients remain price sensitive, Aon saw an increased willingness to deal with risks which previously had been topics of discussion rather than targets of active treatment. A number of clients took up cyber policies, with some taking up slightly reduced limits of liability, as businesses get a feel for their true cyber exposure.
Following a series of high profile product recall incidents in recent years, both in the region and outside, Aon also experienced an increase in the number of domestic clients, particularly from the electronics manufacturing sector, taking up product recall policies. A