Asia casualty insurers face rising claims costs and long settlement periods

Asia’s casualty insurance market faces significant challenges despite opportunities for expansion due to low insurance penetration. According to a report by Marsh Re, insurers in the region are contending with rising claims costs, long settlement periods, and emerging liability risks.

While casualty gross written premiums average approximately 0.1% of GDP across Asia—significantly lower than the 0.5% seen in the US—China dominates the regional market, accounting for roughly $19.8 billion in premiums, or about 70% of the total. Demand for general liability coverage is increasing in sectors such as manufacturing, construction, logistics, and technology.

Insurers are also seeing rising costs in financial lines due to increased regulatory and governance requirements. Although loss ratios across most of Asia remain below 55%, they exceed 60% in South Korea and India. A major complicating factor is the duration of claims, which can take between four and eight years to settle, and occasionally up to 20 years. This long timeline makes it difficult for companies to set appropriate reserves amidst inflation and changing loss trends. Additionally, while litigation costs in Asia have not yet matched the sharp rises seen in the US, Asian companies with US-based operations or exports remain exposed to larger settlements and jury awards.