Asia Market Review 2022

Managing Risk
In Connected Asia
2022 Asia Market Review
Content
Foreword
Special Commentary
Solutions Space – Protect Against Balance Sheet Volatility

Affinity Health
Captives Human Capital
Cargo M&A Transaction Liability
Casualty Political Violence
Credit Property
Cyber Reinsurance
Directors and Wealth Solutions &
Officers Liability Employee Financial Wellbeing
Industry Space – Manage Total Cost of Insurable Risk

Aviation Mining
Construction Power
Digital Economy Private Equity
Energy Real Estate
Financial Institutions Renewable Energy
Hospitality Shipping
Life Sciences & Technology,
Pharmaceuticals Communications & Media
Contributors
2022 Asia Market Review 2

Opportunities in 2022 Solutions Space Industry Space Contributors
Foreword
Anne Corona
Chief Executive Officer, Asia Pacific
Aon
Welcome to the 2022 Asia Market Review, Aon’s ninth annual publication. Our ongoing research on the industry’s
dynamics and performance has revealed several critical insights into the risk and talent landscape in Asia.
To bring you the key market-shaping forces of 2022, we have developed analyses drawn from our long-running work
and research based on the industry’s leading sources of data. We have also gathered insights from Aon leaders across
the region to bring together the voice of our clients in Asia.
Though dominated by the COVID-19 pandemic, there were other significant developments in 2021: emerging
markets which are poised to become global growth drivers, the skyrocketing availability of data, advances in digital
and mobile technology, and galloping progress in analytics and artificial intelligence.
As traditional industry borders fall away in 2022, ecosystems and the digital platforms that enable them, will continue
to influence the future of business. We believe that impact in the new normal will no longer be about offering the
right product, but about advice and holistic solutions that will give companies greater clarity and confidence.
The volatility of the last two years has brought the interconnectivity of risk into sharper focus, making risk management
even more critical. Businesses are now more open than ever before to map current and underrated risks against their
risk appetite early on, embracing better strategies to protect their organisations from volatility. We are also seeing the
focus shift from event-based to impact-based risk assessments.
This year’s report is divided into three main sections which, as in previous years, are interactive both in this document
and on our website:
• Special Commentary : An overview of what to expect from the economic recovery and reopening of
the diverse Asian markets
• Solutions Space : Insights from Aon’s business leaders in key solutions areas to help you protect
against balance sheet volatility.
• Industry Space : Aon’s industry experts share insights on ways to reduce the total cost of risk.
We are living in unprecedented times as we deal with the ongoing risks associated with climate change, cyber
exposure, and a growing health/wealth gap. The pandemic has exposed the exact type of transformative challenges
posed by long-tail risks of any kind. Risks that were once thought of as rare are now becoming more common, and
their impact and consequences are growing more significant over time. At Aon, we recognise that to remain relevant,
innovation must keep pace with the rapidly changing nature of our client needs.
Today’s predictive models and existing solutions are not sufficient to meet the existing challenges. Our role at Aon is
to accelerate innovation and improve access to sources of capital in order to improve client choice and meet evolving
client needs. We hope that the insights presented in the 2022 Asia Market Review will help to shape better decisions,
identify better solutions, and create better paths forward for you and the communities you serve.
From everyone at Aon, I wish you a strong and successful year ahead.

Capitalising on COVID-19 opportunities

in 2022
Renewable Energy
The magnitude of climate change and global warming is
becoming more apparent than ever. Driven by the growing
appetite for newer technologies and solutions in Asia, such
as offshore wind, floating solar power, and battery energy
storage systems, we anticipate more cable-related claims due
Owen Belman
to installation, design, and/or manufacturing errors, while
Head of Asia
reinsurance capacity stays largely intact. Risks with Nat Cat
Aon
exposures will face limited capacity and coverage from traditional
markets. However, there will be an increased interest from new
sources of capital offering alternative transfer solutions. Rising
As markets slowly reopen and recover amid ongoing ESG concerns will force greater focus on exposure to ‘extreme
volatility, future-proofing becomes paramount. Asia’s diverse weather’, resulting in an adjustment of terms and a deeper
geopolitics and differing levels of economic development make scrutiny into policy language – particularly for serial loss clauses.
generalisation of risks – and impact on the business landscape
– problematic, especially with the proliferation of long-tail risks.
However, with digital transformation moving faster in the region
Cyber
than anywhere else in the world, there are unprecedented Although 2021 was extremely challenging for the cyber market,
opportunities to tap into and maximise growth – particularly in we expect it to stabilise with renewed underwriting confidence
the following key areas. as ransomware preparedness, response, and recovery capabilities
improve. With cyber-attacks rising among the top 10 global risks,
businesses need to ensure adequate levels of data protection in
M&A Transaction Liability
line with the digital evolution in Asia. Irrespective of challenging
As pharmaceuticals, renewable energy, and (bio-)technology market conditions, demand is set to increase as those with the
continue to attract investors as viable industries with vast ability to tolerate more risk will gain better access to coverage
potential, claims activity is likely to increase in relation to financial and competitive edge.
statements, tax laws, regulations, stock and inventory, as well as
material contracts. Those looking to alleviate financial losses from
high-value transactions will look to risk transfer mechanisms, such
Intellectual Property
as tax liability insurance and litigation risk solutions to enhance As the world transitions to an increasingly innovation-driven
M&A transactions, supported by insurers who are taking a more economy, intellectual property (IP) becomes even more
commercial approach to underwriting. We anticipate premiums important for companies to create, nurture, and protect. Without
to stabilise somewhat, even amid the uptick in M&A transactions, knowing how to optimise the conversion of innovation into
and an exponential increase in W&I insurance utilisation. specific IP asset classes, leaders who continue to see IP from a
traditional lens stand to lose out on a valuable means to drive
their businesses forward. Using new analytics tools, artificial
Trade Credit
intelligence (AI), and machine learning, we are poised to help
In a recent Aon survey, Business Interruption topped current them understand and leverage their IP assets as collateral in
and future risks in Asia. Organisations must ensure that their borrowing, so as to benefit from a non-dilutive, competitively
current insurance contracts reflect their business requirements priced source of capital. In 2022, we are set to see a significant
and concerns. Exacerbated by geopolitical and supply chain expansion in lending capacity for this market, with increasing
disruptions, insolvencies should increase 15-30% over the year, demand from borrowers.
underlining the importance of pairing mitigative measures
(on CapEx and working capital) with innovative policies and
At Aon, we believe that businesses in Asia can grow and thrive
solutions, such as green credit insurance. Although we anticipate
in a future that is still in flux, if they are better informed, better
a more benign market overall, businesses should contemplate
advised, and able to make better decisions for whatever the world
and prepare for the next ‘grey swan’ event.
needs next. No matter what happens in 2022, we are committed
to using our experience, expertise, and advanced analytics to
bring clarity and confidence to help Asia flourish.

Section 1
Solutions Space
Protect Against Balance Sheet Volatility
Affinity Captives Cargo Casualty
6 7 8 9
Directors
Credit Cyber and Officers Health
Liability
10 11 13
12
M&A
Human Political
Transaction Property
Capital Violence
Liability
14 16 17
15
Wealth -
Reinsurance Financial
Wellbeing
18
19

AFFINITY
Client Tips The impact of COVID-19

continues to shape the
1 2 3
Affinity space.
Drive additional Align your Provide flexible
revenue and insurance solutions and customisable
customer loyalty with customer products that Although digitalisation
through embedded needs in the cater to individual of the claims process has
insurance solutions. ‘new normal’. needs.
become a vital factor in
the insurance industry,
cyber crime is up by
Reflections 600% – and looks set to
• Digital solutions that were aligned with the ‘new normal’
flourished, while traditional products suffered during the
continue rising.
pandemic resulting in a two-tiered recovery. Spare parts have become
• COVID-19 helped to bring much-needed innovation into the
Affinity space in terms of improved distribution models and new,
increasingly expensive
relevant insurance solutions.
due to ongoing supply chain
delays, while coverage for
• Inbased
a difficult economic situation with low interest rates, fee-
revenues via insurance distribution became increasingly
infectious diseases is
important for banking sponsors to meet their financial goals. becoming a norm.
• Affinity programmes that did not pay enough attention to
providing customers with superior solutions and experiences
failed because customers had several purchase options.
• Some insurance products in the consumer and SME segments

did not provide the protection that customers needed during
the pandemic, leaving them disappointed.
Predictions
• Embedded insurance solutions will continue to excite customers
and insurers, but only well-designed programmes will succeed
in a sustainable manner.
• Away‘digital-first’ approach will no longer be optional, but the only

to succeed in an increasingly competitive market where
customers have ample choice.
• The rate of product innovation is set to accelerate further,

particularly in the travel, digital, and wellbeing sectors.
• More non-traditional players will enter the Affinity space by

leveraging proprietary customer data to provide bespoke
insurance solutions.
• Insurance as an experience will become the new way of winning

over millennials, where engagement – not interaction – will
become the new customer relationship standard to meet.

CAPTIVES
Client Tips Asia Loss Experience

1 2 3
Review major Choose the right Risk Perform a
risk classes to set Finance Decision feasibility study
Benign Moderate Severe
optimal boundaries Platform to review on captives
for risk retention risk classes and reports over the next
* Clients who performed full probable maximum loss (PML)
and transfer. on optimum risk 3 to 5 years. reviews understood their risk appetite and ability to retain
retention strategies. risk and outperformed others.
Asia Rate Movement

Reflections Property Damage & Business
• Businesses strove to complete placements and access reinsurance

Interruption (PD/BI) increases
markets via captives. 2021 +10%
• Directors and Officers (D&O) remained a concern but with

planning, innovation and due diligence, clients utilised captives
Premium growth (expected)
2022 +5.6%
to complete placements, especially Sides B and C.
• More clients considered including employee benefits by self-

insuring through captives.
• Timing was crucial. Businesses discussed with their broker Captive risks are typically
soon after their renewal – not before – allowing a time frame of capped by the reinsurance
9 months to form a new captive.
market providing aggregate
and stop-loss protection.
Predictions
Once a claim occurs, the
• Live enquiries from organisations about forming a captive or
protected cell are projected to increase. procedures manual will
document the claims
• Captive owners will reassess their programmes to optimise risk
retention and return on investment. process, who handles the
claims adjustments and
• The general upward mergers and acquisitions (M&A) trend will
lead to risk finance optimisation reviews for risk retention and represents the captive
captives. until ultimate settlement.
• Based on current activity, more captives will be formed in
2022 to help organisations manage their Total Cost of Insured
Risk (TCOIR).
• Asia is an immature captive market and we expect it to grow.

CARGO

1 2 3
Explore global Use risk Analyse
markets for prevention retentions and
the best offers strategies to evaluate options Benign Moderate Severe
and alternative mitigate losses to optimise
capacity. and detail risk. TCOIR.
Asia Rate Movement
2021 Flat to +10%
Reflections 2022 -5% to +5%*
• Accounts were still being closely reviewed and modelled but * Rates are industry-dependent and based on accounts with
favourable loss experience.
aggressive underwriting and competitive ratings on good
business started to return.
• Underwriters continued to apply corrections on poor Container ship losses

performing accounts but with less drastic increases, as rates, have increased over the
deductibles and conditions were gradually adjusted over the last last 24 months, including
few years. One Apus in November
• Insurers continued to manage stock exposures by modelling 2020, Maersk Essen
them to prevent potential accumulations/aggregations and in January 2021 and
ensure adequate pricing while introducing CAT deductibles/ X-press Pearl and Maersk
aggregate limits. Eindhoven a month later.
• Pricing and capacity challenges continued for excess stock Despite this, the 2021
(no transit exposures), of which key insurance market, London,
remained the main provider. claims environment has
been fairly benign with
• Insurers continued to focus on traditional risks and needed to the most significant
address emerging risks such as supply chain disruptions,
communicable diseases and cyber losses.
event being the Ever
Given incident, which
resulted in a large General
Predictions Average (GA) claim.
• Although pricing is expected to plateau, insurers will continue
to ensure that their book remains profitable.
• Overall capacity will remain relatively unchanged, but competition

is expected to increase as insurers get back to growing their top
line after cleaning up their portfolio.
• Active market movements in 2021 may have varying effects on

insurers’ risk appetites, with different industries seeing different
insurer behaviours.

CASUALTY

1 2 3
Maintain Engage with Maintain/
ongoing insurer markets when implement
dialogues changing operating contractual
outside of the models/developing discipline with
renewal cycle. new products. new and existing
relationships. Asia Rate Movement
2021 +5% to +10%
2022 Flat to +5%
Reflections
• 2021 saw a return of the two-speed market, with the rate increase Insurers are wary of new
directly aligned to one’s industry and/or a poor claims history.
technology with unknown
• The information required from insurers remained at an all-time potential losses, evolving
high as renewal processes increasingly became centralised or
escalated for approval. best practices, and possible
sharp rises in demand/
• Large recall losses in the London market did not impact capacity sales. A recent example is
in 2021 but in turn, stimulated capacity growth in certain
industries (excluding battery manufacturing and the like).
the $1bn electric vehicle
recall due to battery
• Enquiries and acquisitions of environmental liability increased failure, which resulted in
in Asia, especially in the power, energy, construction and real
most Liability and Recall
estate industries.
markets withdrawing
from this industry.
Predictions
In most cases involving
• The market is expected to be slow throughout the year, with new technology, insurers
rates flattening should no large losses occur in 2022. need to be taken along
• Demand for clients with good risk management in benign the client journey to
industries is set to increase. fully understand the
exposures before they
• Existing relationships in ‘difficult’ industries need to be can be comfortable with
maintained and built upon as no new insurer capacity seems
to be on the horizon. the risk and support
the full product cycle.
• European insurers, such as Munich RE, Swiss RE, HDI and
AXA XL, are establishing the Centre of Excellence for Digital
Excellence, boosting interest in underwriting new technologies
from Asia.

CREDIT

1 2 3
Explore how Leverage data to Review innovation
credit insurance improve credit in areas such as
can help modelling and loss project financing
working capital. provisioning. and green credit
insurance. Asia Rate Movement
2021 +5% to +10%*
2022 Flat**
Reflections * Rates flattened FY 2021.
• Improvements in the credit risk environment resulted in increased

capacity in many sectors, with more customers benefitting from
** Price reductions for investment-grade risks/well-rated
portfolios.
credit insurance.
• Although government stimulus kept insolvency levels low, credit

risk varied across sectors and economies, depending on their According to the Berne
stage of recovery from the COVID-19 pandemic. Union, insurers had the
• Global growth bounced back in 2021 with a forecasted GDP
growth rate of 5%-6%.
lowest ever claims ratio
for short-term trade
• Volatility remained in the credit risk environment, particularly due credit insurance in 2021.
to geopolitical risks and supply chain disruptions.
To future-proof their
policies, customers should
Predictions ensure that contracts
• Inflation will lead to tightening monetary policy. Leveraged, reflect their business
weaker companies may struggle with increased finance costs. requirements and terms
• Insolvencies are forecasted to increase by 15%-30% globally in
2022, as government support tapers.
can be adhered to.
• Asincrease
supply chain volatility is set to remain, companies are likely to
inventory levels (working capital impact) and diversify
Customers would also
benefit from ‘dummy’
supply (capital expenditure (CapEx) impact). claims exercises and
• Innovation will continue in areas such as green credit insurance
and mergers and acquisitions (M&A) credit solutions.
policy coverage audits.
• Geopolitical risk volatility is set to continue impacting investment

and supply chain strategies.

CYBER

1 2 3
Prepare for Scan systems Implement
a rigorous to detect multifactor
underwriting vulnerabilities authentication –
process. before it is too late. a non-negotiable
for insurers. Asia Rate Movement
2021 +15% to +100%
2022 +15% to +75%*
Reflections
• Premiums and retentions increased sharply while appetite and
capacity saw a downturn in 2021, the most challenging year yet
* Depends on the timing of the renewal cycle (i.e., if major
corrections have already happened)
for the cyber insurance market.
• Exposure to ransomware was a key concern. Several markets

introduced new questionnaires to better understand
Ransomware preparedness,
exposures or imposed co-insurance and sub-limits on as well as response and
ransomware-related losses. recovery capabilities, have
• Retentions, which have historically been low in Asia, almost become crucial due to the
uniformly increased for medium to large customers. Those increase in ransomware-
able to tolerate more risk had better access to coverage and
competition.
related claims.
• Information gathering for the underwriting process became
significantly more intensive and time-consuming, with insurers
Customers can conduct
unwilling to give rough indications of pricing without a
ransomware simulations,
comprehensive submission review. where key stakeholders
• Total limits purchased increased materially as insurers selectively strategise difficult
discussions around paying
deployed limited capacity despite increasing demand.
an extortion demand, as
opposed to attempting
Predictions to recover systems.
• With market stabilisation and renewed underwriting confidence
being key goals, the January 1 treaty renewals will be seen as the Customers should also
first signpost of where the market is moving. identify the vendors
• Market conditions will remain challenging with no immediate or they would engage
significant softening due to persisting global threats, although should an incident occur
adjustments look set to be less severe than 2021.
and incorporate them
• Demand is expected to increase irrespective of challenging
market conditions as customers across various industries
into the simulations.
recognise key risks and view their policies as essential.
• The impact of General Data Protection Regulation (GDPR)-like

privacy laws in Asia may become more apparent due to robust
enforcement measures.

DIRECTORS AND OFFICERS LIABILITY

1 2 3
Ensure that Engage internal Meet with
the renewal risk stakeholders incumbent
process is to assist in underwriting
started early. risk narrative panel along
development. with alternative
insurers.
Asia Rate Movement
D&O (US) 2021 +10% to +100%
2022 Flat to +20%
Reflections D&O (Non-US) 2021

2022
+5% to +20%
Flat to +15%
• The D&O marketplace experienced another year of extreme Professional

Indemnity
2021
2022
+5% to +10%
Flat
volatility, with Special Purpose Acquisition Company (SPAC)
transactions proving to be the most challenging of risks Financial Lines 2021 Flat to +20%
alongside Chinese-US-listed entities. (Other) 2022 Flat to +5%
• Loss-driven underwriting was a key theme, where clients had to

demonstrate risk mitigation/remediation initiatives to prevent
repeating their previous claims. Although the expected
• There was a capacity crunch on all products and industries wave of D&O litigations
across the board where capacity had been in greatest demand. from insolvencies did not
eventuate, there were
• Although the D&O risk correlation with Environmental, Social and reports of non-severe
Corporate Governance (ESG) needed to be assessed, few insurers
tried to tackle the subject from a pricing or coverage perspective. increases in non-cyber
fraud and crime claims.
Predictions There were also concerns
expressed by some
• A greater underwriting acceptance of SPAC D&O risk is difficult insurers on Outside
to contemplate, but non-Chinese-US risks will balance it out
as domestic D&O risk looks set to benefit from less hubris and Directorship Liability
rational underwriting. claims, but none of them
were of material concern.
• As capacity continues to increase, a much-needed balance will
be added to pricing models, particularly where Increased Limit
Factor curves are challenged.
• ESG underwriting will continue to gather momentum,

particularly in areas like climate change and cyber governance.
• Q1 of 2022 is likely to be different from Q4, as shifting market

dynamics on capacity and rate influence year-end budget
underwriting.

HEALTH
Client Tips Medical Trend Rates

1 2 3 Medical trend rate (gross)
Use commercial Digitalise the Analyse population
Educate 2021 8.0%
protection employee benefits risk factors
employees to
about
2022 8.2%
to deal with experience to improve
health,employee
which
pandemic- support agile wellbeing and
will improve Medical inflation rate
related volatility. working. productivity.
wellbeing and
reduce risk. 2021 2.3%
2022 2.4%
Reflections Source: 2022 Global Medical Trend Rates Report
• Utilisation of outpatient services dropped the most due to

pandemic-related movement restrictions, but there was a
significant increase in musculoskeletal conditions likely brought Medical plan utilisation is
about by increase in working from home. expected to exceed pre-
• Medication-related expenses experienced some of the largest pandemic levels in 2022,
inflationary increases. as movement restrictions
• Many insurers responded to emerging needs by developing their are eased further.
ability to deliver virtual consultations, prescriptions, and support
for employee wellbeing (physical and mental). The normalisation in
• The impact of non-communicable diseases on global healthcare utilisation patterns,
emerging mental/
costs increased, with cardiovascular, cancer/tumour growth,
ENT/lung disorder/respiratory, diabetes and musculoskeletal/ musculoskeletal health
back issues driving the most claims.
risks, and the potential
• The increase in non-communicable conditions was linked to the for a greater COVID-19
increase in modifiable risk factors arising from unhealthy personal cost burden will fall on
habits, such as physical inactivity and poor stress management.
the private sector. This
will require employers
Predictions to carefully analyse
their medical plans and
• The easing of movement restrictions will increase utilisation levels employee needs, as cost
for both inpatient and outpatient claims.
pressures increase.
• Further cost increases will be driven by rising inflationary pressures
and an expectation that more COVID-19 healthcare costs will
transition to the private sector.
• Asplanthesponsors
roadmap to normal will be uncertain and vary by country,
need to be agile and secure commercial protection
upon renewals to deal with volatility.
• The largest change in insurer capability is set to be seen in the

areas of virtual care and employee wellbeing, creating a great
opportunity for plan sponsors to build business resilience.

HUMAN CAPITAL
Client Tips Salary Increase

Rate Movements*
1 2 33 * Based on general industries, financial services and
technology companies, excluding companies with
Incubate, Build agility Construct
Educate no increases.
incentivise and and resilience roadmaps
employees to
about
lead transformation by assessing realise
health,workforce
which 2021 2022
through workforce current and future willpotential.
improve
intelligence. people risks. Australia 3.2% 3.4%
wellbeing and
reduce risk. China 5.6% 6.0%
Hong Kong 3.6% 4.0%
Reflections India 8.4% 9.0%
• As virtual working became the new reality, companies had

to consider the ‘remotability’ of roles and the applicability of
Indonesia
Japan
5.8% 6.5%
2.9% 3.2%
location-based pay strategies. Malaysia 4.4% 4.8%
• Many companies started to rethink their employee value

propositions as they embarked on a journey of organisational
Philippines 4.8% 5.6%
Singapore 3.7% 4.0%
transformation.
• There
South Korea 4.0% 4.4%
was a renewed focus on employee wellbeing to build
workforce agility and resilience. Taiwan 3.8% 3.9%
• Companies became more employee-centric, assessing employee

personas and obtaining the opinions of employees on a range
Thailand 4.2% 4.6%
of matters.
• With hiring activity increasing and many employees re-evaluating With employee turnover
what they wanted from their jobs, companies were concentrating rising and talent shortages
on agile, future-proof talent to reshape their workforce.
increasingly widespread,
winning the talent war
Predictions is not a numbers game.
• A clear and consistent value proposition for the future of work is
crucial for building a foundation for post-pandemic success and
Employers need to deploy
beyond. lead analytics on workforce
intelligence in order to
• There will be a greater need for companies to deploy lead analytics
to understand their workforce and implement programmes that identify gaps and construct
build workforce agility and resilience. roadmaps to realise the full
• Companies will need to optimise their workforce for the future by potential of their current
identifying future skills and developing plans to reskill employees. workforce. This will help
• Although companies are maintaining flexibility as they bring to build a strong value
employees back on site, determining the right working model is a proposition for attracting
multifaceted process based on various factors.
top talent in the market.
• There will be a concerted drive to establish an inclusive culture for
employees with diverse backgrounds to improve workforce agility,
enhancing Diversity, Equity and Inclusion (DEI) strategies.

M&A TRANSACTION LIABILITY

1 2 3
Introduce Understand how Engage
transaction Warranty & Indemnity proactively
liability solutions (W&I) insurance with a consultant Benign Moderate Severe
to facilitate M&A can accelerate early in the
transactions. negotiations. M&A process.
Asia Rate Movement
2021 +15% to +30%
Reflections 2022 Flat to +5%
• Deal timelines between signing and closing increased, as parties

sought longer periods to fulfil condition precedents.
* The increase in rates was higher in the second half of 2021,
given hard market conditions.
• Most insurers became more commercial in their approach to risks

associated with COVID-19 and were no longer mandating blanket
exclusions. Claims notifications are
• Seller-flip buy-side policies continued to be on the rise as auction
processes increased and sellers wanted a clean exit.
becoming more frequent
in Asia, due to the increase
• Premium rates increased as coverage remained comprehensive, in claims associated with
due to the uptick in M&A transactions in Asia and the exponential higher-value deals.
increase in W&I insurance utilisation.
• Hard market conditions left capacity providers stretched, Common claims were
extending deal timelines. in relation to financial
statements, tax issues,
compliance with law, stock
Predictions and inventory, as well
• Markets will grow as investors seek new opportunities in
pharmaceuticals, renewable energy, technology and biotechnology.
as material contracts.
• Distressed transactions will emerge in tourism, retail and hospitality

as these industries continue to struggle.
There will likely be
increased claims activity,
• Tax liability insurance and litigation risk solutions are increasing as
risk transfer mechanisms in M&A transactions.
fuelled by more insurance
policies being placed and
• Hard market conditions are expected to persist. businesses looking to
• Although M&A pricing will increase in relation to W&I, premium
rates are expected to stabilise somewhat in the new financial year.
alleviate financial losses.

POLITICAL VIOLENCE

1 2 3
Ensure that Check if Consider long-
coverage extends contingent business term programmes
beyond terrorism interruption is to lock in rates
to civil/political adequately covered. and avoid
unrest. future spikes.
Asia Rate Movement
2021 Flat to +20%
2022 Flat to +10%
Reflections
• Civil/political unrest was a top threat to businesses, driven largely
by socio-economic fallouts from the pandemic.
• Consequences from the withdrawal of Western forces from 2021 has proved to be a
Afghanistan and the reestablishment of the Taliban regime likely less turbulent year for Asia
impacted Islamist extremism across the world.
than prior years. A reduced
• The insurance market experienced another year of political
violence-related losses, notably due to the South Africa riots, with
level of claims could have
claims totalling more than USD 1.5 million. resulted due to COVID-19
and the resultant enforced
• Several Lloyd’s markets withdrew from Singapore/Asia to London,
reducing local placement choices. lockdowns across the
region. In 2022 and beyond,
• More customers extended coverage to political violence rather
than restricting it to terrorism only. a surge is expected in
civil and political unrest
in areas impacted by the
Predictions pandemic-induced socio-
• The socio-economic fallout from the pandemic will remain the
most likely cause of civil disturbances but will hopefully abate
economic downturn.
with vaccine rollouts.
• Heightened tensions around the South China Sea and increased

levels of civil/political unrest in the Philippines, Thailand, and
Myanmar, could make for a turbulent 2022.
• Aspolitical
climate change becomes a bigger issue across Asia, civil/
unrest will likely follow as the effects are felt by diverse
communities.
• Market conditions look set to begin levelling out.

PROPERTY

1 2 3
Start the renewal Reassess potential Consider regular
Educate
process early to price and coverage valuations
employees about
accommodate gaps between against
health,business
which Benign Moderate Severe
requests for international and fluctuations
will improve
There were no major property losses in Asia for both Cat
lead times. local markets, to prepareand
wellbeing for and Non Cat events. However, the regulatory judgements
particularly for underinsurance
reduce risk. in Australia and the UK (which ruled in favour of assureds
global programmes. issues in loss on COVID-19 business interruption claims) could have
a significant impact on 2021 renewal rates, especially in
scenarios. these territories.
Asia Rate Movement

Reflections Nat Cat-exposed property
• Large manufacturing industries continued to show resilience in
curbing COVID-19 related disruptions in key production. 2021 +5% to +15%
• Semiconductor industries struggled to keep up with supply

chains, leading to potential knock-on effects in various industries,
2022 +5% to +15%
Non Nat Cat-exposed property

including automobiles and electronic appliances.
• Despite
2020 +5% to +15%
interest, take-up rates remained low in Asia as companies 2021 Flat to +10%
did not budget adequately for parametric and non-damage
business interruptions.
Predictions With no significant

catastrophic events
• Market differentiation in rate increases will start to widen between
heavy and light industries. hitting Asia in 2021,
the year saw a healthy
• Catastrophe rates will continue to weigh on international reinsurers,
with focus on specific territories. claims margin overall
in the property space.
• Market capacities are expected to stabilise.
• Infectious disease clauses are becoming the new normal, as silent
cyber continues to evolve with varied address options.
COVID-19 related claims
are still trickling into the
portfolios, while overall
adjustments in losses
continue to be prolonged
due to movement
restrictions.

REINSURANCE

1 2 3
Establish Consider evolving Differentiate
Educate
optimum risk and new portfolio
employeesto achieve
about Benign Moderate Severe
reinsurance product lines superior results
health, which
structures and establish from
willreinsurers
improve The experience was moderate across the region with localised
for capital reinsurance through the
wellbeing and events in Malaysia and the Philippines.
efficiency, future partners who can utilisation of data
reduce risk.
performance, and deliver real value. and analytics
profitable growth. and a bespoke
view of risk. Asia Rate Movement
2021 Flat to 5%
2022 Flat to +5%
Reflections
• Whilst the global reinsurer capital position had strengthened
over 2021, intense scrutiny from investors and rating agencies
remained.
• Pricing was very sensitive to loss activity and exposure

movements. Integrity of data was essential.
• Reinsurers were more cautious in deploying their catastrophe

capacity, particularly on proportional accounts.
• ESG (both sides of the balance sheet) became a focal point for
clients.
Predictions
• Coverage for COVID-19 (and the like) will remain restrictive but
there will be clarity around exclusionary language.
• The reinsurance market is expected to be consistent, focused

on individual performance with a continued emphasis on
catastrophe capacity.
• Rapid growth is expected in PA travel-related business and new

travel-related COVID-19 products.
• Activity around cyber products will intensify.

WEALTH SOLUTIONS &

EMPLOYEE FINANCIAL WELLBEING
Client Tips Trends Impacting Key

APAC Markets
1 2 3 Aon Insights - APAC Retirement &
Focus on the Focus on linkages to Focus on the Investment Insights
smart design drive engagement effective governance
of retirement and better employee of retirement Key focus markets where there are material
strategies. financial decisions. programmes. changes that employers need to have on
their radar and comply with:
• Australia
Reflections • China
• Employee financial wellbeing has been affected by levels of

vaccination rates and gender.
• India
• Indonesia
• The secret to employee financial wellbeing includes aligning

needs to measured actions and outcomes.
• Japan
• Philippines
• Influencing employees’ ‘behaviour to money’ is key to instil

sustainable changes in habits and financial resilience.
• Singapore
• South Korea
• Effective employee financial wellbeing requires an inclusive

approach by considering all financial dependents, including
• Thailand
elders and children. Latest updates:

Global Retirement Update | Aon
• Linking employee financial wellbeing to existing employee
benefits drove perceived value.
Predictions
• Foregrounded by volatile investment markets and rising inflation,
monetary policies and regulatory settings will tighten, having
impact on bond yields and employer pension accounting liabilities.
• Life expectancies will continue to increase due to wealth and

healthcare improvements, as will above-inflation healthcare costs.
• ESG strategies will focus on how climate change is set to

affect the investment landscape due to increased scrutiny on
responsible investing and related environmental reputational risk.
• The focus is on global diversification and enhanced return sources

through alternative assets, such as real estate and private debt
will increase.
• New legislative and regulatory changes will continue to impact

markets, including changes in Australia, China, Cambodia, India,
Indonesia, Japan, Philippines, Singapore, South Korea, and Thailand.
Learn more from our Aon Insights Series 2021 (Asia) interview with
Karl Woon, Executive Director, Human Capital Management Benefits
from Goldman Sachs. Aon Insights Series 2021- Asia | Aon

Section 2
Industry Space
Reduce Total Cost of Risk
Digital
Aviation Construction Energy
Economy
21 22 23 24
Life
Financial
Hospitality Sciences Mining
Institutions
& Pharma
25 26 28
27
Private Real Renewable

Power
Equity Estate Energy
29 30 31 32
Tech,
Shipping Comms
& Media
33
34

AVIATION

1 2 33
Demonstrate Maintain and retain Review
Educaterisk
continued experienced people, toleranceabout
employees and
Benign Moderate* Severe
investment in especially pilots, for resilience across
health, which
safety and risk aircraft operators. all
willareas of the
improve * Across the board
management. business.
wellbeing and
reduce risk.
Asia Rate Movement
2021 +5% to +25%*
• Pandemic-induced economic slowdown/slow recovery had a

significant impact on the financial health of the aviation industry,
* Rates are expected to fall for some key developed
jurisdictions, and to hold for emerging markets.
leading to cash-flow challenges.
• Cyber risks remained a major threat and ranged from basic

ransomware to threats connected to denial-of-service attacks and 2020 and most of 2021 saw
stolen data publication.
a high aggregation risk
• Business interruption continued for the industry – borders
remained closed, passenger numbers were slow to recover, and
of ‘aircraft on the ground’.
global economic conditions deteriorated further. Returning aircrafts
• While a shortage of trained professionals (pilots) was always a
challenge for the industry, this was amplified in 2021 due to early
(and pilots) to service will
be weighed down by the
retirement and growing barriers to entry (financial). sheer volume of resourcing
required in a concentrated
period. Claims continue
Predictions
to occur, particularly in
• While international travel demand is set to grow year-on-year, it
will still be significantly below pre-pandemic levels. IATA’s initial
ground-related incidents.
projections of industry recovery not happening until 2024 appear
well founded. In October 2021, a Texas jury
awarded a USD 353 million
• The industry will manage risk using both insurance and non-
insurance methods, with greater focus on mitigating uninsured risks verdict to a United Airlines
and preparation for low frequency/high severity events. wing walker, who was
• Underwriting capacity will return to the sector, creating more struck by a van at Houston’s
competition for aviation risks and placing pressure on recent trends Bush Intercontinental
of premium increases.
Airport in September 2019.
• Innovation will focus on the travel experience and safety, including
Health Passports, contactless experience, and more automation.
This incident could set a
trend for inflated awards,
• With regards to potential volatility arising from more acute risks,
parametric solutions will be deployed more frequently, e.g., the
compelling insurers to
offering of Commodity Insurance triggered by price change. alter their approach to
This can bring certainty and stability to fuel procurement, an airport risks.
expense that is prone to volatility.

CONSTRUCTION

1 2 3
Provide detailed Robust Strong risk
information underwriting due management
regarding design/ diligence means and mitigation
construction longer timelines are measures will
methodologies for needed to achieve be viewed more
the best results. optimal results. favourably.
Asia Rate Movement
2021 +10% to +15%
2022 Flat to +10%
Reflections
• Construction capacity continued to be squeezed with markets
withdrawing from the sector, creating greater supply and Large loss activities have
demand pressure, especially in terms of Nat Cat capacity. been benign overall.
• Some delayed construction projects that required period Technology continues
to be a key investigation
extensions have been subjected to premium increases and
adjustment of terms beyond normal expectations, especially tool in supporting remote
where automatic extension periods are exhausted. investigations into the
• The repercussions of heavy losses in construction risks over the cause of loss and damage
last 2 to 3 years, coupled with COVID-19, have extended the analysis. On a positive
hardening period of the region’s construction insurance market. note, there have been
• There has been an increasing need to consider parametric improvements in post-loss
coordination with a careful
solutions to mitigate natural hazards exposure in projects not
readily accepted by traditional construction markets. selection and review of
loss adjustor nominations.
Predictions
• The volume of anticipated projects in 2022 is set to drive increased
market appetite and a balanced approach to underwriting.
• Positive risk management and comprehensive underwriting

submissions will continue to remain critical in achieving
differentiated terms.
• Greater consideration will be given to innovative covers such as

parametric solutions, which will continue to be considered in
conjunction with traditional covers for projects in high Nat Cat
exposure regions.
• The emergence of new technologies will continue to be viewed

with caution, commensurately leading to increased rates and
more restrictive terms.

DIGITAL ECONOMY

1 2 3
Ensure thorough Pay close attention Align company
risk assessment to data protection business models
of vendors and regulations and with social impact
fulfilment of ensure compliance. elements – or
Several major e-commerce sites in Asia suffered large-
contractual regulators will. scale data breaches that exposed personally identifiable
responsibilities. information belonging to millions of customers.
Cyber risk was one of the key drivers of losses and was
further complicated as governments implemented stricter
regulatory regimes.
Reflections Digital economies cannot afford to ignore this further and

must have a robust cyber resilience strategy in place for
• 2021 saw many Asian digital economies announcing public

listings, with organisational readiness and regulatory compliance
prevention, detection, and response.
playing a major role in their success.
• Global supply chain disruptions and unprecedented increases

in technology adoption caused major chip shortages, which are
likely to continue into 2022.
• Digitalisation created a new paradigm for workforce attraction,

development, and culture, requiring companies to look into new
ways to retain high-quality talent.
• Due to an increasingly interconnected world, companies

have had to consider the impact of individual risks and
interconnected ones.
Predictions
• Digitalisation and technology adoption will continue to
accelerate as more borders open, though a return to
pre-pandemic habits remains unlikely.
• Increased investment in AI, automation and 5G deployment is

likely, even as global supply chain challenges persist.
• Many digital economies will permanently adopt remote working

or a hybrid model, which will help with the tech talent crunch.
• Digital economies will play a bigger role in ESG initiatives

that benefit communities via Greentech, digital literacy, and
financial inclusion.
• Anticipate further increasingly heightened regulatory

conditions as fast-growing digital economies have a growing
impact on society.

ENERGY

1 2 3
Increase Continue to Continue
preparedness present risk leveraging
Benign* Moderate** Severe
around ESG early and learnings from
positioning for thoroughly. 2019/2020. *Downstream & upstream **Downstream
market discussions.
Asia Rate Movement

Reflections Downstream
• Due to COVID-19 and oil price volatility-induced CapEx cuts

2021 +2.5 to +15.0%
2022 -5% to +7.5%
across the oil & gas (O&G) sector in 2020 -21, operational
activity reduced, negatively impacting demand and supply, Upstream
geopolitical issues and the global upstream premium pool. 2021 +2.5% to +7.5%
• Following the sharp downstream market correction in 2019, 2022 Flat to +5.0%
appetite gradually returned during the second half of 2021.
• Policy language clarity was improved, particularly around

business interruption in 2019-20, resulting in little change in
COVID-19 has underlined
2021, except to volatility clauses.
the importance of
• Enquiries for captives and protected cell captives continued to assessing key equipment
increase in 2021, with companies looking to structure themselves replacement times and
to better withstand a hard market in the future.
indemnity periods. Strong
communication lines
Predictions must be established with
insurers, loss adjusters
• More insurers will refine their underwriting positions on and brokers early in the
fossil fuel, making ESG a higher priority when underwriting
claims cycle to ensure that
risk assessments.
all parties remain aligned.
• Sanctions and their impact on underwriting positions will
continue to impact markets and clients when reviewing expansion Attritional losses in the
risks to the Myanmar O&G sector. upstream sector continue
• Although downstream business appetite is set to return for to erode underwriting
margins and negatively
energy markets with new capacity added, existing underwriting
controls introduced since 2019 will be maintained. impact combined ratios;
similar to downstream
• O&G demand, particularly in Asia, is set to return to pre-pandemic market trends.
levels and bolster oil prices to a 7-year high, likely causing an
uptick in drilling & offshore CAR activities in 2022-23.

FINANCIAL INSTITUTIONS

1 2 3
Consider the use ESG is Cyber risk
of credit insurance increasingly governance
across multiple important from a needs to be
asset classes. risk perspective. best in class.
Asia Rate Movement
Credit risk
Reflections 2021 Flat*
• Deployment increased in credit insurance for project finance 2022 Flat*
Non-financial risk
transactions aimed at sustainability-linked projects.
• Amid COVID -19-accelerated market disruptions by fintech 2021

2022
+20% to +40%
+10% to +20%
and digital economies, incumbents (i.e., regulated financial
institutions) were able to embrace the challenges.
* Softening for investment-grade risks.
• Fraud risk was ever prevalent without shortage of headlines

across cyber and digital currency fraud.
There has been some
• Cyber red teaming and adversary simulation attack strategies increase in the frequency
became more common across Asia.
of fraud losses across
• There was an increased focus on communications within the the region, as the large
client network to mitigate cyber crime risks.
commodity fraud losses of
the last two years continue
Predictions to play through the credit
insurance market. The
• The use of credit insurance to support project finance transactions threat of ransomware and
is increasing, driven by risk mitigation, credit concentration,
other cyber crime has all
and capital optimisation.
the financial institutions
• New technologies will continue to be adopted for innovation at on high alert, not just for
scale, balanced against regulatory influences, cyber crime and their own risk profiles but
litigation risk scenarios.
also for the consumer base.
• Cyber risk governance practices will need to keep pace with
threat actors.
• Larger banks will continue to focus on the impact of climate

change on lending portfolios, investment strategies, regulatory
reporting, shareholder expectations and broader stakeholder
communications in their keynote messaging.

Opportunities
COVID commentary
in 2022 Solutions Space Industry Space Contributors
HOSPITALITY

1 2 3
Understand Work proactively Actively manage
potential shifts in with brokers to avoid total cost of
portfolio (asset class coverage issues and insurable risk.
and geography). uninsured exposure.
Asia Rate Movement
Nat Cat-exposed property
• The hospitality sector has been facing an over-supply of rooms 2022 Flat to +5%*
due to ongoing waves of COVID-19. Non-Nat Cat-exposed property
• Due to declining numbers of international tourists and 2021 +5%

business travellers, there was a significant shift in the hospitality 2022 +5%**
operating model.
Liability
• Talent shortages continued to affect the industry. 2021 Flat to +5%
• Conference and event revenue streams were significantly 2022 Flat to +5%***
reduced due to ongoing waves of COVID -19.
* Dependent on the construction, protection and Nat Cat
exposure of the physical asset locations.
** Many hospitality locations are targets and present a
Predictions considerable exposure.
*** Decreased footfall due to the pandemic has translated
• There will be an increase in distressed sales or assets repurposed to into lower exposures for many assets with public spaces.
residential properties, senior housing, healthcare, or data centres.
• Sustainability will increasingly become a board priority and a key Reflecting the reduced
risk issue. footfall and ongoing
• There will be a number of distressed asset sales requiring the need COVID-19 impact on the
hospitality operating model,
for transaction liability cover.
overall claims volumes
• Various strains of COVID-19 will continue to disrupt travel, with remain historically low.
recovery being uneven.
• As the hospitality industry starts to recover, the need for a The increasing adoption of
COVID-19 travel insurance affinity product should be explored technology-driven claims
to help de-risk bookings for travellers. solutions is helping to
drive efficiencies, improve
visibility across the client's
claims portfolio, and reduce
the claims lifecycle.

Opportunities
COVID commentary
in 2022 Solutions Space Industry Space Contributors
LIFE SCIENCES & PHARMACEUTICALS

1 2 3
Capitalise on your Remain open to Adapt your
brokers’ inquisitions conversations for strategic roadmap
and your carriers’ greater underwriter to IPO by reviewing
value-added clarity (e.g., D&O heightened
services. insurance). exposures.
Asia Rate Movement
CGL, financial 2021 Flat to +10%
loss, recall, 2022 Flat to +10%
Reflections clinical trials
Financial lines 2021

• Cyber threats continued to increase with digital advancements
+5% to +20%
(Non-US D&O) 2022 Flat to +15%
in products, movements towards AI, clinical trials taking on
hybrid models, and increases in telemedicine and virtual care.
• Supply chain vulnerabilities and resulting business interruptions The rate of acceleration to
remained a top concern of clients.
which clients are changing
• 2021 saw some of the highest turnovers and competition their operating models
for talent in the industry. Human capital remained key to all
organisations and a top concern for clients.
presents new exposures,
creating a crucial need
for innovative insurance
Predictions solutions to fill potential
coverage gaps. They
• Greater efficiencies will become fundamental to sustain should continue to seek
innovation at the current expected rate, e.g., embracing
opportunities for hybrid/decentralised trials or utilising AI/ advice in areas such as
new technology. ESG, NDBI, IP, recall and
cyber exposures to best
• With the pandemic putting many trials on pause, studies are assess their exposure
moving towards home participation, resulting in a more diverse
patient population being recruited, added data points and and potential solutions.
results, as well as chances for greater innovation – bringing new
considerations to exposures.
• The competitive landscape will remain with increased M&A/

IPO market activity, increased initial risk following an IPO
(e.g., D&O, reputational risk, regulatory governance) and
increased competition/emerging markets.
• Following the increased investments in building vaccine

manufacturing facilities in Singapore (e.g., BioNTech, Sanofi,
Thermo Fisher), there may be a rise in global pharma interest
in SEA.

MINING

1 2 3
Understand and Prepare for ESG Review risk
declare business conversations and retention appetite
interruption issues understand the against risk
amid changing market appetite. philosophy.
commodity prices.
Asia Rate Movement
2021 +5% to +15%
2022 Flat to +5%
Reflections
• Markets were consistent in their approach and sought to meet
internal growth targets following remediation in the previous Recovery time from
years, making renewals less challenging in 2021. a loss event has been
• Although competition had returned to the insurance market and exacerbated by COVID-19
insurers had seen their working capital increase to enable growth, and resulting supply
underwriting was yet to exceed their technical appetites. chain disruption. This and
• Focus on key exposures such as tailings dams, contingent changing commodity prices
are important factors to
business interruption, and port blockage continued into 2021,
with some markets perceiving limits to be above market consider when establishing
standards or carriers’ appetites. an insurance programme.
• Coverage extensions for cyber, infectious contagious diseases A strong working
and, to a lesser extent, strikes, riots and civil commotions were
not offered.
relationship between the
client and insurers, loss
adjusters and brokers
Predictions is also key to ensuring
• Although property markets are starting to report underwriting smooth claims processes.
profits, renewals will be somewhat challenging with rate
increases expected to be less substantial than in previous years.
• Like 2021, more opportunistic capacity will be replaced in

2022 as prices start to plateau. Notwithstanding, prudent
underwriting of coverage will remain.
• Business interruption volatility clauses are expected to continue.

• Companies need to be transparent about their ESG initiatives,
projects, targets, strategies and third-party ratings. These will
become increasingly important rating factors upon renewals,
with thermal coal risk rates continuing to rise higher than overall
mining rates.

POWER

1 2 3
Nurture Pay particular Allow sufficient
relationships with attention to time to collate and
insurers for more Nat Cat resilience present detailed
visibility and and mitigation information
engagement. measures. to insurers.
Asia Rate Movement
2021 +10% to +25%*
2022 Flat to +10%
Reflections
* More if Nat Cat exposures are high, where losses prevail, or
• Estimated Maximum Loss (EML) studies and increased attention

where there are capacity constraints, with some jurisdictions
able to stabilise local pricing.
to design standards, especially in Nat Cat exposed locations,
provided valuable insight to clients’ exposures and assisted in
determining the right levels of risk retentions and transfers to
2021 has seen relatively
manage rate increases.
lower large loss activity
• Early engagement to determine the appropriate go-to-market compared to the last 3
strategy was vital in managing expectations, especially on years. On a positive note,
more challenged, complex risks such as coal and hydro, and
there have been earlier
particularly where lenders are involved.
interim payment approvals
• Decisions made on risk and insurance were ideally not considered with the higher utilisation
in isolation, given their interlinkage. of risk accounting in the
• Tougher market conditions called for more creative thinking to claims preparation process,
improving the timeline
optimise insurance structures.
of cashflows to clients.
• A deeper scrutiny of policy wording/language, particularly
around policy extensions and exclusions prevailed, with insurers
generally seeking to remove soft market covers.
Predictions
• The market looks set to stabilise but hold firm.
• Robust risk management practices will remain key to achieving
optimal terms.
• Consideration of alternative structures and the blending of traditional

and non-traditional solutions will become increasingly important.
• Early engagement to determine the optimal market strategy

and renewal objectives will be important in managing the
renewal process.

PRIVATE EQUITY

1 2 3
Deploy strategies to Cyber resilience Adopt ESG
reduce volatilities in goes beyond strategies for
funds, transactions portfolio companies. future capital/
and portfolio fund raisings.
companies.
Asia Rate Movement
2021 +20% to +50%
2022 Flat to +20%
Reflections
• Cyber governance strategies were increasingly being assessed
across the entire PE ecosystem.
Transaction liability
• Although counterparty credit risk had increased during the insurers have observed
pandemic, economic rebounds took hold, resulting in a greater
increasing claims
sense of financial certainty as credit markets began to relax from
earlier worse-case scenario modelling.
frequencies and
severities, even though
• Extraordinary government decisions impacting industries they were not directly
highlighted the previous years’ uncertain political environment.
evident from a regional
• For portfolio companies, cultural and organisational alignment perspective. Private
with business strategies proved to be key during the pandemic, equity firms are likely
highlighting the need for PE firms to sponsor at a portfolio company to be more vulnerable
level as their road map to building a future-proof workforce.
to more targeted cyber-
attack campaigns,
Predictions including business
email compromises,
• Some insurers have expressed caution on PE investments/exit while expanding their
strategies involving IPO or SPAC transactions, while also being
sensitive to geopolitical risk.
consideration to supply
chain cyber risks for
• As economies start to open up, balance sheet and capital portfolio companies.
optimisation strategies can differentiate clients through the
innovative application of credit insurance market products,
surety and bonding solutions.
• IP valuations, financing and ancillary strategies are all likely to

gain momentum.
• ESG positioning has quickly become a driving force for the asset
mandates of institutional investors. There will be a greater focus
on responsible investments and how data/analytics will help
underpin ESG scorecards.

REAL ESTATE

1 2 3
Manage the impact Communicate Ensure that your
of repositioning changes in programme remains
and transactions business strategy competitive and
on portfolios and to the insurance fit for purpose.
insurable risk profiles. market.
Asia Rate Movement
Casualty 2021 +5% to +10%
2022 Flat to +5%
Reflections
Financial Lines 2021 +5% to +20%
• Correction in asset prices was expected in China, India, and (D&O, non-US) 2022 Flat to +15%
Australia.
Financial Lines 2021 +5% to +10%
• Many corporates looked to access working capital from long- (Professional

Indemnity)
2022 Flat
term real estate holdings using sale and leaseback transactions
and a transition to an asset light business model. Property
• Asset class focus pivoted towards those with reliable income Nat Cat-exposed
property
2021
2022
+5% to +15%
+5% to +15%
streams, such as logistics, multi-family residentials, and data
centres. Non-Nat 2021 +5% to +15%
Cat-exposed
• ESG was firmly in focus for investors. Asset owners recognised property
2022 Flat to +10%
the need to address building efficiency to remain competitive

with tenants and investors alike.
Some classes of business,

Predictions such as liability, saw
• COVID-19 has accelerated changes in the way we work and artificially low numbers
of losses in 2021 due to
live. We will see ongoing changes to the portfolios that hold
traditional office/retail and hospitality assets. the impact of COVID-19
pandemic lockdowns on
• Traditional assets may be repositioned, and the risk profile will retail and hospitality
change.
sectors.
• Policy wordings will continue to be tightened by insurers
looking to remove ambiguous coverage areas, specifically An absence of large
for cyber, infectious disease, and areas related to contingent catastrophe losses in 2021
business interruption.
also contributed to the
• Rates will continue to increase for most product areas in the benign overall claims
single digit range. environment.
• Insurers will push for higher deductibles and compliance with
survey recommendations.

RENEWABLE ENERGY

1 2 3
Early Combine risk Pay particular
engagement with management with attention to
your broker and alternative solutions resilience, especially
market is key. and best-in-class for Nat Cat-
information. exposed sites.
Asia Rate Movement
2021 +10% to +15%*
2022 Flat to +10%
Reflections
• The insurance industry endeavoured to keep pace with the latest
* Increases beyond 15% for high Nat Cat-exposed countries,
where unproven or prototypical technologies or wider
coverage is being purchased.
technologies rolled out by the OEMs, necessitating a deeper
technical underwriting assessment and impacting available policy
terms.
Cable-related claims
• Markets continued to take a conservative approach to Nat Cat, continue to make up a
limiting capacity for highly exposed risks, leading to increased
interest in alternative risk transfer solutions where traditional
majority of reported loss
markets are only willing to offer limited cover. activities. The causes
of loss in respect of
• Due to ESG considerations, in contradiction with their growth installation errors, design
aspirations, some insurers could not support renewable energy
and/or manufacture
projects if the parent company of the project developer had coal
generation in their portfolio.
are estimated to
represent more than
• There was increased interest and appetite for newer technologies 50% of overall claims.
in Asia, such as offshore wind, floating solar, and battery energy
storage systems.
Predictions
• Reinsurance capacity will remain largely intact, but the industry
will continue to be tested as newer technologies emerge.
• Defects in design, workmanship or materials remain a leading cause

for losses – tighter terms and policy exclusions can be expected.
• Greater attention will be paid to the potential exposure of extreme

weather, resulting in an adjustment of terms to reflect this.
• A deeper scrutiny of policy wording/language, particularly around

policy extensions and exclusions will prevail, with several key areas
of change to note depending on the technology used (e.g., serial
loss clauses).

SHIPPING

1 2 3
Explore global Detailed information Consider amending
markets for packages and deductibles and
the best offers risk prevention insuring conditions
and alternative strategies can for changes in
capacity. lower premiums. premiums.
Asia Rate Movement
P&I 2021 +10% to +15%
2022
Reflections +5% to +15%
• Insurers continued to apply corrections on poor performing H&M 2021

2022
+2.5% to +7.5%
Flat to +5%
accounts, but increases were less drastic than before as rates,
deductibles and conditions have been gradually adjusted over
the last few years.
• Competitive rates were witnessed on select good business fleets Container ship losses
– led by Asian-based insurers. have notably increased
• The decline in seafarers’ mental health over the last 18 months over the last 24 months,
with the Suez Canal
started to affect ship schedules and maintenance, pushing crew
retention initiatives to the forefront of shipowners’ concerns. incident highlighting
issues around vessel
• High freight rates for container ship and bulk carrier owners sizes, the unavailability
boosted revenue for the shipping industry in a way that has not
been seen in over a decade. of suitable salvage
equipment in many of the
world’s shipping lanes,
Predictions etc. Generally speaking,
• Marine cyber will become the must-have insurance in the there have been fewer
claims with a significantly
coming years.
higher quantum of loss.
• Although H&M insurers will continue to ensure their book
remains profitable, pricing is expected to plateau.
• New entrants have emerged in international hull markets (mainly

as MGAs) while insurers have begun employing senior/class
marine insurers particularly in Europe, increasing competition.
• Insurers will start looking at topline growth again in the near

future. More competitive deals will be made.
• P&I increases have been in line with Aon’s expectations thus far
(>10%) while high IG pool claims will be recorded in 2022.

TECHNOLOGY, COMMUNICATIONS & MEDIA

1 2 3
Focus on cyber Stay ahead of Align cyber
resilience, keeping disruption, be security strategies
Benign* Moderate** Severe
abreast of remote it political, with Intellectual
work, and internal economic, social, Property risks.
* Property & Casualty (P&C)
colleague training. technological, legal, ** Directors and Officers Liability
or environmental.
Asia Rate Movement

Reflections Property & 2021 Flat to +10%
Casualty 2022 Flat to +5%
• Unprecedented volatility in the financial lines market reached
fever pitch in 2021. Financial 2021 +20% to +50%
Lines
• Capital raisings witnessed extremes of success and failures
2022 +10% to +20%
(IPO withdrawals).
• Businesses had to raise the bar for cyber underwriting submissions. Cyber ransomware was
a consistent theme
through the year.
Predictions
• Additional capacity entering the market will have positive impact There are concerns on IPO,
SPAC and related securities
for buyers across most product lines.
claims emanating from
• Headwinds remain for financial lines, albeit without the level of valuations, disclosures and
volatility seen in 2021.
geopolitical interference
• Cyber governance, resilience and risk mitigation strategies will be in the year ahead.
critical for successful market outcomes.
• All eyes will be on China.

• Supply chain disruption will impact upstream technology,
communications & media manufacturing.

Contributors
Foreword Casualty Political Violence
Heath Jose Julian Taylor

Anne Corona +65 6239 7529 +65 6231 6402
anne.corona@aon.com heath.jose@aon.com julian.taylor@aon.com
Sophia Loon
Editors Property
+65 6512 0215
Jane Drummond sophia.loon@aon.com
Jiunn Woei Lee
+65 6239 8747 +65 6231 6397
jane.drummond@aon.com Credit jiunnwoei.lee@aon.com
Murray Wood Steve Taylor Grace Tan

+65 6645 0116 +65 6512 0226 +65 6231 6334
murray.wood@aon.com stephen.taylor2@aon.com grace.tan@aon.com
Peter Hulyer
+65 6239 7698 Cyber Reinsurance
peter.hulyer@aon.com
Andrew Mahony George Attard
Jamie Sparkes +65 6313 7080 +65 6239 8739
+852 2862 4275 andrew.mahony@aon.com george.attard@aon.com
jamie.sparkes@aon.com
Directors and Officers Liability Wealth Solutions &
Employee Financial Wellbeing
Solutions Space Murray Wood
+65 6645 0116 Ashley Palmer
murray.wood@aon.com +852 2917 7963
Affinity ashley.j.palmer@aon.com
Stuart Watson Health

+65 6239 8829
stuart.watson@aon.com Simon Godfrey Industry Space
+65 6512 0275
simon.godfrey@aon.com
Captives Aviation
Alastair Nicoll Human Capital Gary Moran

+65 6231 6485 +65 6239 7645
alastair.nicoll@aon.com Rahul Chawla gary.moran@aon.com
+65 6313 7050
rahul.chawla.2@aon.com
Cargo Construction
Jan Steven Kelder M&A Transaction Liability Nicki Tilney

+65 6239 8789 +65 6239 8745
jan.steven.kelder@aon.com Blossom Lim nicki.tilney@aon.com
+86 10 5632 8778
Li Lin Kea blossom.lim@aon-cofco.com.cn
Digital Economy
+65 6239 7578
li.lin.kea@aon.com Shaun Tan
+65 6239 7625 Wei Lin Ho
shaun.tch@aon.com +65 6512 0273
wei.lin.ho@aon.com
2021 AsiaAsia
2022 Market Review
Market Review 35 35
Energy Mining Renewable Energy
Melissa Shepherdson Melissa Shepherdson Nicki Tilney

+65 6231 6309 +65 6231 6309 +65 6239 8745
melissa.shepherdson@aon.com melissa.shepherdson@aon.com nicki.tilney@aon.com
Alister Laird
+65 6313 7126 Power Shipping
alister.laird@aon.com
Nicki Tilney Vladimir Ljubisavljevic
+65 6239 8745 +65 6239 8793
Financial Institutions nicki.tilney@aon.com vladimir.ljubisavljevic@aon.com
Murray Wood Hang Thu Telke

+65 6645 0116 Private Equity +65 6313 7027
murray.wood@aon.com hang.thu.telke@aon.com
Murray Wood
+65 6645 0116
Hospitality murray.wood@aon.com Technology, Communications
& Media
Rupert Roberts
+65 9230 4258 Real Estate Murray Wood
rupert.roberts@aon.com +65 6645 0116
Andrew J. Bisconte
murray.wood@aon.com
+65 6645 0180
Life Sciences & Pharmaceuticals andrew.bisconte@aon.com
Heath Jose
+65 6239 7529
heath.jose@aon.com
Taylor Funk
+65 9780 9683
taylor.funk@aon.com
2021 AsiaAsia
2022 Market Review
Market Review 36 36
About Aon
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better — to protect and enrich the lives of people around
the world. Our colleagues provide our clients in over
120 countries with advice and solutions that give them
the clarity and confidence to make better decisions to
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© Aon plc 2022. All rights reserved.

The information contained herein and the statements expressed are of a
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and timely information and use sources we consider reliable, there can be
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Asia Market Review 2022

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Asia Market Review 2022

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Managing Risk

Solutions Space – Protect Against Balance Sheet Volatility

Industry Space – Manage Total Cost of Insurable Risk

2022 Asia Market Review 2

2022 Asia Market Review 3

Capitalising on COVID-19 opportunities

2022 Asia Market Review 4

Affinity Captives Cargo Casualty

2022 Asia Market Review 5

Client Tips The impact of COVID-19

• Some insurance products in the consumer and SME segments

• Away‘digital-first’ approach will no longer be optional, but the only

• The rate of product innovation is set to accelerate further,

• More non-traditional players will enter the Affinity space by

• Insurance as an experience will become the new way of winning

2022 Asia Market Review 6

Client Tips Asia Loss Experience

Asia Rate Movement

• Businesses strove to complete placements and access reinsurance

markets via captives. 2021 +10%

• Directors and Officers (D&O) remained a concern but with

• More clients considered including employee benefits by self-

• Asia is an immature captive market and we expect it to grow.

2022 Asia Market Review 7

Client Tips Asia Loss Experience

• Underwriters continued to apply corrections on poor Container ship losses

• Overall capacity will remain relatively unchanged, but competition

• Active market movements in 2021 may have varying effects on

2022 Asia Market Review 8

Client Tips Asia Loss Experience

2022 Asia Market Review 9

Client Tips Asia Loss Experience

• Improvements in the credit risk environment resulted in increased

• Although government stimulus kept insolvency levels low, credit

• Geopolitical risk volatility is set to continue impacting investment

2022 Asia Market Review 10

Client Tips Asia Loss Experience

for the cyber insurance market.

• Exposure to ransomware was a key concern. Several markets

• The impact of General Data Protection Regulation (GDPR)-like

2022 Asia Market Review 11

DIRECTORS AND OFFICERS LIABILITY

Client Tips Asia Loss Experience

Reflections D&O (Non-US) 2021

• The D&O marketplace experienced another year of extreme Professional

• Loss-driven underwriting was a key theme, where clients had to

• ESG underwriting will continue to gather momentum,

• Q1 of 2022 is likely to be different from Q4, as shifting market

2022 Asia Market Review 12

Client Tips Medical Trend Rates

Reflections Source: 2022 Global Medical Trend Rates Report

• Utilisation of outpatient services dropped the most due to

• The largest change in insurer capability is set to be seen in the

2022 Asia Market Review 13

Client Tips Salary Increase

Reflections India 8.4% 9.0%

• As virtual working became the new reality, companies had

• Many companies started to rethink their employee value

• Companies became more employee-centric, assessing employee

2022 Asia Market Review 14

M&A TRANSACTION LIABILITY

Client Tips Asia Loss Experience

Reflections 2022 Flat to +5%

• Deal timelines between signing and closing increased, as parties