The Makings of Imminent Insurance Markets in Asia

With China’s imminent entry into the World Trade Organization, the deregulation of the Japanese insurance market, and the liberalization of Indian insurance regulations, Asia is poised to become a major insurance magnet over the next decade. Foreign companies able to capitalize on the recent increased openness of the Asian markets stand to reap substantial profits. However, companies entering these largely uncharted waters will encounter various navigational obstacles. The roadblocks and risks facing eager insurers are both political and psychological in nature, with many linked to cultural differences. This paper will broadly survey the motivations (of both foreign insurers and Asian governments) underlying the ongoing market deregulations in several countries, the obstacles to foreign entry, and the potential risks that must be considered. Also outlined herein are insurance models which may be appropriate for specific markets.