Overall, growth in advanced Asia Pacific markets in the next two years are is forecast to continue, with demand drivers like rising affluence and an ageing population still in place, says Swiss Re Institute in its World Insurance Report released yesterday.

In Taiwan, newly-introduced group annuity products could boost life premiums. Unit-linked and other investment-type products will remain vulnerable to financial market volatility, even though the strong equity market recovery in early 2019 is re-fuelling interest.

Swiss Re forecasts robust growth in mortality business in Japan and Australia in 2019/20. However in Japan, given tax changes related to Corporate-Owned Life Insurance (COLI) products, insurers have temporarily paused their sales of COLI products, which could weigh on market growth this year. And in Australia, growth could be impacted by the Royal Commission's report resulting in higher regulatory costs and more cautious sales practices.

Swiss Re expects profitability in the life sector to remain subdued as interest rates remain low.

In its review of 2018 developments, Swiss Re says that life insurance premiums in advanced Asia Pacific increased by 1.4% last year, after shrinking by on average 2.9% in the preceding two years.

In South Korea and Australia, premiums contracted by around 6% in 2018. In the former, the decline was driven by savings products, with insurers less keen on these under IFRS 17. In Australia, continued low interest rates and allegations of mis-selling weighed.

In Japan, Swiss Re estimates that premium growth turned positive but was constrained by lower rates after the adoption of new mortality tables. Premium growth in Taiwan and Singapore slowed, with sales of Central Provident Fund schemes (CPF) in Singapore down due to changes in agent fees. Meanwhile, sector growth in Hong Kong was affected by continued controls on capital outflows from mainland China.