Several APAC insurers log market cap declines in Q4 amid uneven recovery

Of the 20 largest Asia-Pacific insurers, 14 saw declines in market capitalization in the fourth quarter of 2021, as new COVID-19 variants, elevated inflation and other downside risks continued to pose threats to an uneven economic recovery.

Ping An Insurance (Group) Co. of China Ltd. regained its position as the region's largest insurer after its market cap grew 5.6% to $138.42 billion. Hong Kong's AIA Group Ltd. logged a 12.6% drop, falling to the second spot with a market cap of $121.62 billion, while China Life Insurance Co. Ltd. occupied the third position after posting a 2.4% increase, according to data compiled by S&P Global Market Intelligence.

The remaining four mainland Chinese insurers on the list posted declines in their market cap in the three-month period, with PICC Property and Casualty Co. Ltd.'s market cap falling 15.6% to $18.17 billion as of Dec. 31, 2021.

Outlook better

"We are positive on the outlook for global insurance premiums, expecting above-trend real growth of 3.3% in 2022 and 3.1% in 2023", Swiss Re Institute said in a November 2021 report. "Growth is benefiting from rising risk awareness in both the life and non-life segments, as consumers and businesses alike seek protection following the shock of the COVID-19 pandemic and above-average natural catastrophes."

In China, profitability of non-life insurers is expected to improve moderately in 2022 and 2023, backed by investment returns and improving underwriting profit, the research firm said.

Analytics company GlobalData forecasts China's general insurance industry to grow to 2.13 trillion yuan in 2025 from 1.36 trillion yuan in 2020, in terms of direct written premiums. The industry's expected compound annual growth rate of 9.5% over 2020-2025 period, however, remains shadowed by regulatory changes, the ongoing economic challenges and the resurgence of the COVID-19 pandemic, the company added.

Gainers/losers

Taiwanese insurers emerged as the biggest gainers in the quarter, with China Development Financial Holding Corp. recording the largest gain of 56.9% and securing 19th spot on the ranking list. Fubon Financial Holding Co. Ltd. and Cathay Financial Holding Co. Ltd. also logged increases in their market capitalization, at $36.81 billion and $29.67 billion, respectively.

All the Indian insurers on the list recorded quarterly declines in market capitalization. ICICI Prudential Life Insurance Co. Ltd. closed the top 20 list with the biggest decline of 16.5% and a market cap of $10.82 billion.

As of Jan. 6, US$1 was equivalent to 6.38 Chinese yuan.