Identifying Risks,
Uncovering Opportunities
How can the C-suite manage volatility to drive performance in 2019? Discover insights in Aon's sixth annual Asia Market Review.
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Solutions Space
Insights on protecting against balance sheet volatility
Industry Space
Steps to reduce total cost of risk across key industries
Future Space
Perspectives on managing risk and maximising potential beyond 2019
2019 Asia
Market Review
Property
Today, in a changing market cycle, a flat renewal is seen to be a good outcome. Silent cyber has come to the fore as Allianz introduces specific cover for this risk – reaffirming Aon’s view that cyber attack-induced property damage and bodily injury will receive broader and better cover under property and casualty policies; while financial losses are covered by cyber standalone policies.
As long as no major catastrophe event takes place in 2019, buoyant local market conditions will continue to enable rate reductions.
Severe
Solutions Space
Industry Space
Future Space
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2018
2019
-5% to Flat
Moderate
Interesting Facts
Future Space
Industry Space
Solutions Space
Benign
Benign
Moderate
Severe
Casualty
Clients with a favourable loss history continued to secure premium reductions and we predict this will continue in 2019. The scope of cyber coverage provided by third-party liability policies such as commercial general liability and product liability has been a focus of client conversations.
Escalating trade tensions between U.S. and China is expanding to capture other geographies and may further impact supply chains for clients in North Asia. Technology will continue to disrupt certain industries, especially in the automotive space.
Interesting Facts
Asia Loss Experience
Benign
Moderate
Severe
Benign
Moderate
Severe
Asia Rate Movements
-5 % to -10%*
2018
2019
Flat
How many victim organization
do not recover any losses
suffered
due to fraud?
58
%
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Insurance
Self-Insurance
Mixed
Medical Plan Financing Approaches
2018
5 - 10% decrease for programmes that solely require capacity.
Flat to +10%**
* Require capacity.
** For higher risk exposures.
Loss experience continues to be benign for most of our clients, but there are certain industries where we see increasing frequency and severity losses such as transportation and mixed commercial building.
Cyber
Asia is not immune to significant cyber losses as businesses in the region began to see the full impact of major breaches in 2018. Business interruption remains a prevalent threat, continuing to drive two longstanding concerns for clients: the ability to accurately quantify the financial impact of a cyber event and incident response readiness.
As geopolitical tensions rise in a volatile trading environment, we expect the sophistication of attacks will increase and zero-day exploits will be sought after.
Interesting Facts
Benign
Moderate
Severe
Benign
Moderate
Severe
05%
05%
2018
2019
How many victim organization
do not recover any losses
suffered
due to fraud?
58
%
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Insurance
Self-Insurance
Mixed
Medical Plan Financing Approaches
Top Medical Conditions
Cardiovascular
Cancer/ Tumour Growth
Gastrointestinal
95
%
74
%
47
%
Cargo
2018 has been marked by escalating Sino-U.S. tensions, geopolitical volatility, and economic upheaval. The ongoing trade war has forced several manufacturers to shift production to other parts of Asia, while stiff sanctions imposed on certain industries continue to drive uncertainty.
Looking ahead into 2019, we foresee sophisticated programmes such as Stock Throughput (STP) and Supply Chain insurance continue to come to the fore as clients seek to augment existing cover with holistic solutions for challenges across the entire supply chain.
Interesting Facts
Asia Loss Experience
Benign
Moderate
Severe
Benign
Moderate
Severe
Asia Rate Movements
Flat to +5%
05%
2018
2019
Flat
Flat
How many victim organization
do not recover any losses
suffered
due to fraud?
58
%
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Insurance
Self-Insurance
Mixed
Medical Plan Financing Approaches
Top Medical Conditions
Cardiovascular
Cancer/ Tumour Growth
Gastrointestinal
95
%
74
%
47
%
Property
Casualty
Financial Lines
Credit Solutions
Cyber
Terrorism & War
M&A Transaction Liability
Cargo
Health
Talent, Rewards
& Performance
Property
Casualty
Financial Lines
Credit Solutions
Cyber
Terrorism & War
M&A Transaction Liability
Cargo
Health
Talent, Rewards
& Performance
Financial Lines
Financial institutions, legal and accounting professionals, technology, and construction professionals were the predominant buyers of professional indemnity. However, miscellaneous professions and emerging industry sectors have added to demand, often motivated by contractual requirements. A noticeable trend for insurers is towards pushing for flat or minor pricing increases for accounts with no increased risk exposure at renewal.
The cycle of continuing rate reductions will receive stronger resistance from insurers. There will be an increasing balance between premium decreases versus coverage quality, without sacrificing the latter on account of the former.
Interesting Facts
Benign
Moderate
Severe
Benign
Moderate
Severe
-5% to Flat
2018
2019
Mostly Flat
*Reductions available in preferred risk categories.
•
Credit Solutions
Brexit, trade wars, and protectionism have all become a reality. Regulatory issues, coupled with unpredictable government behaviour, have caused a heightened feeling of uncertainty.
Looking forward, it will be important for insurer appetite to keep pace with clients’ changing business models and requirements. Digital will have a bigger impact on the industry, as the digital economy continues to rapidly evolve, innovate, and disrupt.
Interesting Facts
Benign
Moderate
Severe
Benign
Moderate
Severe
How many victim organization
do not recover any losses
suffered
due to fraud?
58
%
Lorem ipsum dolor sit amet, consectetuer adipiscing elit, sed diam nonummy nibh euismod tincidunt ut laoreet dolore magna aliquam.
Insurance
Self-Insurance
Mixed
Medical Plan Financing Approaches
Top Medical Conditions
Cardiovascular
Cancer/ Tumour Growth
Gastrointestinal
95
%
74
%
47
%
2018
2019
Terrorism & War
The continued threat posed by global terrorist groups and their evolving attack methods have been a cause of growing concern for many of our clients. As the risk evolves, so has the market response with new, innovative coverages emerging –such as cover for loss or damage caused by government security forces whilst attempting to neutralise potential threats.
The market continues to grow in both maturity and sophistication to meet the many challenges clients will face in 2019. Gradually, clients will evolve from being price-driven to being value-driven.
Interesting Facts
Benign
Moderate
Severe
Benign
Moderate
Severe
-10% to Flat
2018
2019
Flat
How many victim organization
do not recover any losses
suffered
due to fraud?
58
%
Lorem ipsum dolor sit amet, consectetuer adipiscing elit, sed diam nonummy nibh euismod tincidunt ut laoreet dolore magna aliquam.
Insurance
Self-Insurance
Mixed
Medical Plan Financing Approaches
Top Medical Conditions
Cardiovascular
Cancer/ Tumour Growth
Gastrointestinal
95
%
74
%
47
%
M&A Transaction Liability
Demand for warranty & indemnity (W&I) insurance and other contingent liabilities arising from M&A transactions, such as tax liability insurance, continued to grow in 2018 – reflecting an increasing awareness of the coverage among clients and M&A advisers.
In 2019, we foresee clients becoming more open to considering the use of insurance as a means of risk management beyond W&I coverage, such as for tax insurance and cover for known litigation matters, IP insurance for intellectual property violations, and environmental insurance for pollution-related events.
Interesting Facts
Benign
Moderate
Severe
Benign
Moderate
Severe
-18% to -19% (Real Estate, China)*
2018
2019
* Rates have declined as more insurers show appetite for Asian risks. Other industry and country risks have seen lesser declines.
Loss experience continues to be benign for most clients, but we are seeing increasing frequency and severity losses in certain industries such as transportation and mixed commercial building.
USD1 billion
Tax Liability Insurance
-5%
Health
Increasing medical benefit costs continue to be a prevalent challenge in 2018, with cost containment named the top mitigation method for Asia employers.
In 2019, we foresee that employers will continue to face challenges in funding the costs of medical benefits, which exceed all other corporate finance metrics year on year. People are living and working longer but developing chronic disease much earlier — and the real cost on society, and on business performance, has yet to be fully realised.
Interesting Facts
Employee cost sharing is an important element of a medical cost mitigation strategy.
89
%
Source: Aon’s 2019 Global Medical Trends Report
Insurance
Self-Insurance
Mixed
Medical Plan Financing Approaches
Top Medical Conditions
Cardiovascular
Cancer/ Tumour Growth
Gastrointestinal
95
%
74
%
47
%
of employees share in claims outlays.
2018
Medical Trend Rates
Medical
Trend Rate
(Gross)
General
Inflation
Rate
8.9
%
8.6
%
3.0
%
2.8
%
Talent, Rewards and Performance
While Singapore’s economy expanded by 3.6 percent, employee engagement levels in the market remained at 59 percent. Yet, real wage growth remained steady at 3.8 percent in 2018 and is expected to rise to 3.9 percent in 2019.
In the coming year, we expect more clients to examine their people practices to better support an agile way of working. Attributes such as innovation, critical problem-solving, and strong business acumen will be key in seeking, developing, and engaging with the best talent.
Interesting Facts
Engagement Levels (2018)
Singapore
Positivity
Cooperativeness
Drive
3 Qualities That Drive Engagement
Salary Increase Rate Movements (2018-2019)
59%
Aviation
Shipping
Energy & Mining
Financial Institutions
Renewable Energy
Real Estate
Automotive
Construction, Power
& Infrastructure
Aviation
Recent losses have highlighted the challenges arising out of the introduction of newer aircraft technology, and the vital role of adequate pilot training for the technology to truly enhance the operational safety of the aircraft – especially with experienced pilots becoming increasingly hard to come by.
‘Embracing change’ seems to be the current ethos in an industry that has grown used to abundant capacity and persistent low rates. Aon’s 2017 Global Risk Management Survey listed cyber as the greatest threat to the aviation industry.
Interesting Facts
Benign
Moderate
Severe
Benign
Moderate
Severe
Flat to +5%
+5% to +10%
General Aviation (GA)
2019
2018
Airlines
Aerospace
+10%
+7.5% to +12.5%
+5 to +7.5%
Construction, Power
& Infrastructure
2018 was a challenging year for the construction market, as insurers competed for growth and market share. Meanwhile, the operational power market has continued to weather a combination of attritional and more significant losses.
Risk management and premium spend will continue to be high on the agenda in 2019 as Asian clients look to achieve a balance between a cost-effective and fit-for-purpose insurance programme.
Interesting Facts
Asia Loss Experience
Benign
Moderate
Severe
Benign
Moderate
Severe
How many victim organization
do not recover any losses
suffered
due to fraud?
58
%
Lorem ipsum dolor sit amet, consectetuer adipiscing elit, sed diam nonummy nibh euismod tincidunt ut laoreet dolore magna aliquam.
Insurance
Self-Insurance
Mixed
Medical Plan Financing Approaches
Top Medical Conditions
Cardiovascular
Cancer/ Tumour Growth
Gastrointestinal
95
%
74
%
47
%
Asia Rate Movements
Construction: Severe in certain sectors suchas large hydro.
Loss Experience
Power
Benign
Moderate
Severe
Benign
Moderate
Severe
Severe in certain sectors, such as large hydro
Rate Movements
Flat to -10%
-5% to +10%
2018
2019
Flat to 10% Decrease - Slowed towards the year-end
Flat - Exact rate movement depends on risk profile
•
•
Aviation
Construction, Power
& Infrastructure
Energy & Mining
Shipping
Financial Institutions
Renewable Energy
Real Estate
Automotive
What Does The Future
Hold In Asia?
Captive utilisation in Asia remains low as many organisations still choose to wait until very close to their renewals before considering it as an option. Nonetheless, there are close to 7,000 captives worldwide that have proven to be effective in controlling and managing risk.
A larger number of captive feasibility studies have led to the formation of new captives in Asia. If these trends continue, we expect the overall number of captives in the region to increase as corporates look to utilise it as a strategic tool to manage total cost of insurable risk (TCOR).
There has also been growing interest in Insurance Linked Securities (ILS) in Asia – due to increasing demand and capacity from ILS investors globally.
There is interest in Life and Health & Benefits (H&B).
Cyber remains an area of interest, but despite an increase, the overall number of policies remains relatively small.
•
•
•
Intellectual Property
Cyber Due Diligence
Digital Economies
Intellectual Property
Intellectual Property Insurance: Is Asia Ready?
Intellectual property rights (patents/trademarks/copyrights) are intangible assets that companies carry on their balance sheets. They are capable of producing revenues in their own right and are backed by legal enforcement. Over time, organisations are increasingly relying on these intangible assets to drive the success of their operations.
Intellectual property has had a growing influence on business strategy including exposing companies to new potential liabilities.
As competitors rely more heavily on intellectual property rights to increase their market share, companies find themselves facing the persistent threat of litigation related to allegations of intellectual property infringement.
The Aon-sponsored Ponemon Institute Global Intangible Asset Risk Transfer Study found that 53 percent of the total value of companies surveyed are in their intangible information assets. However, only 15 percent of information assets are covered by insurance.
Mobility as a Service: How Is This New Economy Shaping Up Today?
In the past decade, Mobility as a Service (MaaS) has grown into a USD31 billion industry, By 2028, it is anticipated to climb to USD1.7 trillion.
Integrating the numerous forms of mobility options are mobility platforms – so consumers can open a mobility app, provide their destination, and have the most efficient route outlined against each mode of transportation.
Overlay this with goods and services purchased in advance online, then prepared at transition points
Automotive
With the proliferation of automotive technology, vehicles are more reliant than ever on software. The offshoot is that there has been a rise in software-related recalls and cybersecurity breaches in 2018 and while we saw an upsurge in liability shifting from driver to vehicle/technology manufacturer.
As clients grow more aware of the financial impact of recall events and as pressure mounts to increase cost of recovery from suppliers by OEM, we expect more clients to voluntarily purchase recall insurance and on a whole turnover basis.
Interesting Facts
Benign
Moderate
Severe
Benign
Moderate
Severe
-5% to +5%
Flat to +10%
Negligible
2018
2019
Flat
5 to 10% Decrease - For programmes that solely require capacity
Flat to 10% Increase - For higher risk exposures
Negligible - For accounts that are already enjoying competitive pricing. Accounts with challenging loss profile could see a bigger rate increase than in 2018.
•
•
•
Loss experience continues to be benign for most clients, but we are seeing increasing frequency and severity losses in certain industries such as transportation and mixed commercial building.
Energy & Mining
The 40 percent plunge in oil price at the end of 2018 will undoubtedly challenge the much anticipated 2019 recovery. The greatest impact to mining was withdrawal of European market capacity from thermal coal risks; although domestic insurers have not yet followed.
As we enter 2019, energy and mining clients will be hard pressed to benefit from continued rate reductions and will have to adopt a more strategic approach towards retention and pricing control as well as consider alternatives such as captives.
Benign
Moderate
Severe
Benign
Moderate
Severe
General Decrease
2018
2019
Flat
Generally Decrease -With the exception of offshore wind
5 to 10% Decrease -Depending on technology / NatCat exposuresFlat to 10% Increase - For higher risk exposures
•
•
Loss experience continues to be benign for most clients, but we are seeing increasing frequency and severity losses in certain industries such as transportation and mixed commercial building.
Moderate
Severe
Benign
Energy
Asia Loss Experience
Asia Rate Movements
Moderate
Benign
Flat
Real Estate
As climate change takes hold, we witnessed an increase in natural catastrophe events – leading clients to look closely at how to transfer these risks away from the balance sheet. Clients sought meaningful natural catastrophe limits, but also required premium reductions.
Real estate prices are predicted to remain high in Asia due to increasing volumes of institutional capital. Smart buildings and building automation technologies are also generating new cyber-related exposures.
Interesting Facts
Benign
Moderate
Severe
Benign
Moderate
Severe
-05-10%
+10%
Negligible
2018
2019
Flat
5 to 10% Decrease - For programmes that solely require capacity
Flat to 10% Increase - For higher risk exposures
Negligible - For accounts that are already enjoying competitive pricing. Accounts with challenging loss profile could see a bigger rate increase than in 2018.
•
•
•
Loss experience continues to be benign for most clients, but we are seeing increasing frequency and severity losses in certain industries such as transportation and mixed commercial building.
Shipping
Geopolitical tensions, evolving trade routes and patterns, and a number of notable losses continued to trouble the maritime industry in 2018. A wave of syndicates exited the marine class including WR Berkley, Standard, Aspen, and AMTrust, and Aon estimates this will slash capacity by as much as USD100 million.
Going forward, there is still some relief to be had from the changing Lloyd’s market, as insurers such as Gard and Allianz are stepping in to fill the existing leadership positions.
Benign
Moderate
Severe
Benign
Moderate
Severe
Interesting Facts
Hull & Machinery
Asia Loss Experience
Asia Rate Movements
05%
Generally Decrease -With the exception of offshore wind
5 to 10% Decrease -Depending on technology / NatCat exposuresFlat to 10% Increase - For higher risk exposures
•
•
Loss experience continues to be benign for most clients, but we are seeing increasing frequency and severity losses in certain industries such as transportation and mixed commercial building.
Moderate
Severe
Benign
Protection & Indemnity
2018
2019
Loss Experience
Rate Movements
Moderate
Benign
Flat
-5% to Flat
Flat to +5%
Severe
Flat to +10%
+10 to +20%
+10%
Offshore
CAR
Offshore Operational
Onshore
Operational
2018
2019
-5% to Flat
Onshore
EAR
+2.5%
Flat to +2.5%
Flat to +10%
Flat to +20%
Flat to +10%
Flat to +15%
Flat
- 10%
Financial Institutions
Cyber risk continued to be at the forefront of our financial institution client conversations. Strategies covering security, incident response, quantitative assessment, and transfer have now reached a point where there is a broader appreciation among stakeholders for more cohesive and coordinated efforts.
Cyber and conduct will likely be focal points for insurers. There are already underwriting efforts to better understand risk correlations influenced by governance and culture.
Generally Flat*
Generally Decrease -With the exception of offshore wind
5 to 10% Decrease -Depending on technology / NatCat exposuresFlat to 10% Increase - For higher risk exposures
•
•
Loss experience continues to be benign for most clients, but we are seeing increasing frequency and severity losses in certain industries such as transportation and mixed commercial building.
Moderate
Severe
Benign
2018
2019
Asia Loss Experience
Asia Rate Movements
Moderate
Benign
Renewable Energy (RE)
Heightened interest in the development of RE facilities in the region will continue to attract investors in 2019 and beyond. RE clients in operational power were able to benefit from prevailing soft market conditions.
Looking ahead, we expect the construction market to look to the RE sector for growth opportunities, particularly for markets seeking to shift their focus away from traditional fossil fuel power generation. Given the appetite for RE and growing specialist marketplace to support the operational power sector, we anticipate clients will continue to benefit from competitive tension.
Generally Decrease -With the exception of offshore wind
5 to 10% Decrease -Depending on technology / NatCat exposuresFlat to 10% Increase - For higher risk exposures
•
•
Loss experience continues to be benign for most clients, but we are seeing increasing frequency and severity losses in certain industries such as transportation and mixed commercial building.
Moderate
Severe
Benign
Power
Loss Experience
Moderate
Benign
-5 to -15%
Generally Decrease -With the exception of offshore wind
5 to 10% Decrease -Depending on technology / NatCat exposuresFlat to 10% Increase - For higher risk exposures
•
•
Loss experience continues to be benign for most clients, but we are seeing increasing frequency and severity losses in certain industries such as transportation and mixed commercial building.
Moderate
Severe
Benign
Construction
Asia Loss Experience
Moderate
Benign
Flat - 10% increase for higher
risk exposures.
2019
For accounts that are already enjoying competitive pricing. Accounts with challenging loss profile could see a bigger rate increase than in 2018.
Flat
-10% to Flat
Flat
Malaysia
Thailand
China
India
Phillipines
Indonesia
Singapore
Malaysia
Thailand
Vietnam
63%
64%
69%
71%
71%
76%
3.8-3.9%
5.0-5.2%
5.2-5.3%
8.6%-8.7%
How many victim organization
do not recover any losses
suffered
due to fraud?
58
%
Lorem ipsum dolor sit amet, consectetuer adipiscing elit, sed diam nonummy nibh euismod tincidunt ut laoreet dolore magna aliquam.
Insurance
Self-Insurance
Mixed
Medical Plan Financing Approaches
Top Medical Conditions
Cardiovascular
Cancer/ Tumour Growth
Gastrointestinal
95
%
74
%
47
%
Benign: Both operational and construction.
Severe: Globally.
Severe losses outside of Asia.
2018: With the exception of offshore wind.
2019: Depending on technology / NatCat exposures.
•
•
Reputation Risk
Data & Analytics
Affinity
Cyber Due Diligence
Innovation & Technology
Digital Economies
What Is The Impact Of Reputation Risk On Shareholder Value In The Cyber Age?
Reputation risk is a formidable challenge for companies worldwide. For the past 10 years, reputation risk has occupied one of the top spots in Aon’s Global Risk Management Survey.
By the year 2000, an emerging risk had established itself: reputation impact in the absence of physical loss. In a research collaboration between Aon and Dr. Deborah Pretty from Pentland Analytics, we found that widespread use of social media increases the impact of reputation events and significantly elevates a company’s reputation risk.
In fact, the value impact of reputation crises has doubled since the advent of social media. On average, 5 percent of shareholder value is lost over the post-event year.
This impact on value is greatly influenced by three factors:
1.
2.
3.
Reputation Risk
Why It’s Easier To Win At Blackjack Than Insurance
Cloud computing, the Internet of Things (IoT), advanced analytics, telematics, blockchain and, of course, the latest all-encompassing analytical wizardry – artificial intelligence (AI).
They are terms that potentially may leave us looking differently at our industry’s capability to control, price risk, engage with customers, reduce cost, improve efficiency, and expand insurability – and create opportunities to make good data-driven decisions we can learn from a known set of outcomes.
Blackjack happens to be the perfect petri dish to remind ourselves about making better decisions.
At the Aon Analytics Insights Conference 2018, Jeffrey Ma, former VP of Analytics and Data Science at Twitter and kingpin of the famous MIT Blackjack Team, shared his thoughts on the future of some of the new capabilities in analytics, arguing that “the biggest misconception is that AI is like magic and solves everything. In reality, it is only going to be as good as the problems you point out and the data set that’s available to you.”
The Gig Economy: Is Asia Ready?
With globalisation, technological advancements, and demographic shifts, the gig economy has taken off globally. A survey by Kelly Services Outsourcing and Consulting Group showed that 84 percent of talent managers in Asia Pacific are already hiring gig workers, significantly higher than the global average of just 65 percent.
However, gig workers do not enjoy the traditional benefits of full-time employment so there is a protection gap in their business and personal needs. As companies look to attract the
top talent in the market, they are taking this opportunity to enhance their employer brand.
One such method is to offer protection around loss of income, medical expenses, and professional indemnity. As the largest region in the world for the gig economy, employers in Asia are more pressured than ever to protect the needs of their gig workers in order to protect the needs of their business.
Data & Analytics
Affinity
First-of-its-kind policy placed in Asia, paving the way for similar placements in Asia in 2019.
Insurance capacity available for deals involving European and U.S. targets.
Premium rates for real estate deals coverage; no policy deductibles available.
~ 0.7% Upwards
Source: Aon's ‘Wired For Engagement’ white paper.
18%
Organisations that capture candidate feedback after selection stage.
Source: Aon's 2018 Talent Acquisition Study (Asia Pacific & Middle East).
Source: Aon's 2018 Talent Acquisition Study (Asia Pacific & Middle East).
Employee referrals
Recruitment consultants
Online job portals
3 Sources of
Top-Quality Talent
Non-performance of
components
Efficacy issues
Top 2 Losses
in Asia
Appetite Scaled Down
AXA XL (previously XL Caitlin) shifts recall risk appetite in Asia, especially from China & Taiwan.
London Down, Asia Up
Appetite and capacity trends
are opposing in two key locations
Property and Casualty (P&C) remain the key lines of business for captives
Our latest benchmarking results show:
Interesting Facts
What Is A Captive?
A bona fide insurance or reinsurance company wholly owned by its insureds. A captive is usually formed in a specialised regulatory environment (‘domicile’), with the purpose of insuring/reinsuring the risks of its parent company and any affiliates – just as a conventional insurance company would.
Financial Institutions
Healthcare
Top 2 Industries
With Captives
#1 Singapore
Largest captive domicile
in Asia Pacific.
> USD100 billion
Total captive premium income written worldwide
Source: Hong Kong Financial Services Development Council.
The ability to produce instant and global crisis communications.
Perceptions of honesty and transparency.
A programme of active social responsibility.
Interesting Facts
Samsung and Toyota
Two new entrants in the World’s Top Ten Brands 2018 list are Asian
Technology firms
Occupy the majority of places in the World’s Top Ten Brands
2018 list
What Is Reputation Premium?
Reflects the earning power of the firm that is valued by investors but not captured in either the brand or net assets.
*Could continue to soften for certain risk.
-5% to Flat
-5% to Flat
Asia Rate Movements
Flat
Flat
-5%
-5% to Flat
-5% to +10%
Hull & Machinery
Protection & Indemnity
2018
2019
2018
2019
Rate Movements
Flat
Flat
Flat
Flat
Flat
Flat
Mostly Flat*
Source: Aon’s 2019 Global Medical Trends Report
-5% to -10%
General Decrease
-5% to -10%
Mostly Flat
Operational Power
Construction
2018
2019
Construction:
Flat to -10%
Flat to -10%
Flat*
-5% to +10%
Operational Power
Construction
2018
2019
Innovation & Technology
Captives
Captives
Mining
Energy
Mining
Interesting Facts
Japan, Korea & India
3 out of Top 4 markets for patent filing are in Asia
5.7 million
China’s share of the 9.11 million trademark applications in 2017
What Risks Are Hidden Behind The Screens?
Due diligence is a well-established practice for companies considering the acquisition of another enterprise. For sophisticated buyers, it is unfathomable to enter into a transaction of such magnitude without visibility as to the target company’s state of affairs. But the scope of the due diligence exercise is critical. Understanding the target company’s financial affairs and legal obligations is fundamental, but comprehensive due diligence should also include existing insurance policies, environmental exposures, management, and corporate culture.
Cyber due diligence – which involves a review of the target company’s information security infrastructure – has now come into the picture, reflecting the increased value organisations place on intangible assets. In this new world, cyber risk is top of mind for most boards and the cybersecurity posture of a target company becomes key. The adverse impact of cyber losses extend beyond losing digital data, and can include:
Reputational Damage
Regulatory Scrutiny
Class Action Exposure
Business Interruption
•
•
•
•
Operational Power & Construction
Construction: Severe in certain sectors such as large hydro.
to
and are ready for immediate pick-up – and we are looking at a complete digital economy centred on expediency and efficiency.
At 33.2 percent, Singapore leads the way in Asia for user penetration. When it comes to revenue, China generates USD77,337 million per year and is only second to the U.S.; while Japan is fourth with USD17,248 million. The unprecedented speed of technological advancement and changing consumer preference in this space require a unique ecosystem of collaboration.
Interesting Facts
960,000 units
Number of auto sales lost in China due to ride-sharing (2016)
24%
Projected share of self-driving vehicles in China by 2035
Source: statista.com
Ofo Bicycle (China)
Largest bike-sharing operator worldwide
Source: statista.com
Source: statista.com
~
Source: IMF WEO October 2018, ATAG Aviation Benefits Beyond Borders 2018
Asia Pacific aviation industry supports 30 million jobs
USD684 billion in GDP
Source: The Boeing Company's Commercial Market Outlook 2018-2037
Projected delivery for Southeast Asian airlines by 2037
>4,500 airplanes
Source: IATA's 20-year industry forecast
Annual passengers from Asia Pacific over the next 20 years
+2.35 billion
Source: IATA's 20-year industry forecast
China will be the world's largest aviation market
By 2025
Flat
* With downward pressure on investment grade risk.
Interesting Facts
Source: IMF WEO October 2018, ATAG Aviation Benefits Beyond Borders 2018
Streamlining processes in call centres while assisting portfolio managers in wealth and asset management business lines
Artificial intelligence (AI)
Over the last five years, IT jobs in FI have grown to support process automation and optimisation
35% increase
Source: IATA's 20-year industry forecast
The average cost to financial institutions per compromised record
USD206
Source: IATA's 20-year industry forecast
The amount stolen from Punjab National Bank by SWIFT code manipulation over seven years
USD1.77 billion
Asia Loss Experience
Asia Rate Movements
Asia Loss Experience
Asia Rate Movements
Asia Loss Experience
Asia Rate Movements
Asia Rate Movements
Asia Loss Experience
Asia Rate Movements
Asia Loss Experience
Asia Rate Movements
Asia Loss Experience
Asia Loss Experience
Asia Rate Movements
Asia Loss Experience
Asia Rate Movements
Asia Loss Experience
Asia Rate Movements
Asia Loss Experience
Asia Rate Movements
Interesting Facts
Source: Wood Mackenzie Global Wind Power Market Outlook Update: Q3 2018
Cumulative APAC wind power capacity growth driven by East Asia
>2x in 10 years
Source: Wood Mackenzie Outlook for Asia Pacific Wind Power 2018
Auctions
New technology
Public health demands
Energy security
Low interest financing
Developers looking to new markets
6 Factors Supporting APAC Wind Power Growth
Source: IATA's 20-year industry forecast
Due to favourable announcements from Japan & South Korea governments
1.5GW Upgrade QoQ
Source: Wood Mackenzie Global Wind Power Market Outlook Update: Q4 2018
2019
China
The desire for autonomy is strongest, especially among young people with specialist skills who seek greater freedom and entrepreneurship opportunities.
USD1.5 trillion
Total addressable market for the gig economy globally
Interesting Facts
Source: PwC
Sources: Freelancers Union “53 million” report, Professional Contractors Group, Future Working: The Rise of Europe’s Independent Professionals Reports
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Vietnamese banks
Increased audit scrutiny has seen a surge in fraud losses
Source: Aon's 2018 Talent Acquisition Study (Asia Pacific & Middle East).
AXA XL
Major M&A activity in 2018
Source: Aon's 2018 Talent Acquisition Study (Asia Pacific & Middle East).
Chinese insurers
Increased activity in international business
Source: Aon's 2018 Talent Acquisition Study (Asia Pacific & Middle East).
Source: Study of 105 banks in Asia by McLagan,
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