Consumers across Asia are adjusting to financial pressure tied to job insecurity, rising living costs, chronic health conditions, and longer life spans.
According to a new survey from the Swiss Re Institute, these factors are reshaping demand for life and health (L&H) insurance while exposing significant barriers to coverage.
Despite expressed interest in insurance, especially in emerging Asia where 60% of respondents intend to purchase life insurance within a year, many face obstacles to obtaining coverage. The most frequently cited barriers include perceived high premiums, low awareness of insurance options, and products that do not match consumer needs.
Broader economic concerns also factor into purchasing decisions. In emerging markets, around 60% of respondents named unemployment as their top worry, while in advanced economies, 45% pointed to cost of living pressures.
These barriers contribute to a widening health protection gap (HPG), which the Swiss Re Institute estimates reached US$258 billion across the 12 surveyed markets in 2024, measured in premium-equivalent terms. This represents a 21% increase from 2017.
The figure reflects household healthcare costs that respondents identify as financially stressful, based on survey responses and World Health Organization (WHO) data.
China accounts for more than half of the region’s HPG due to its large population and rising household spending on modern medical treatments. However, the $258 billion figure excludes those unable to access or afford treatment, suggesting the gap may be underestimated – particularly in countries like India where both affordability and availability of healthcare remain limited.
Out-of-pocket (OOP) spending continues to be a key stressor across the region. The survey found a general increase in financial strain related to medical expenses compared to 2017, with the trend more prominent in emerging economies such as India.
While public healthcare programs have expanded in several countries – such as national schemes in Indonesia, India, and Thailand – gaps persist in coverage adequacy and reach. Chronic illnesses and serious health conditions remain leading causes of OOP-driven stress.
Fitch Ratings recently maintained a neutral outlook on Asia-Pacific life insurers for 2025, citing steady earnings and strong capital positions. However, the agency revised its country-level assessments for China and Taiwan due to a slowdown in premium growth, increased market volatility, and changing regulatory conditions.
In addition to the health-related shortfall, the survey estimated the mortality protection gap (MPG) in the same markets at US$132 billion in 2024, also in premium-equivalent terms.
That figure marks a 35% increase from 2017, largely attributed to growing income replacement needs of a larger middle class and relatively low penetration of life insurance, especially in developing markets. Rising household incomes have elevated insurance needs, but uptake has not kept pace.
Despite uneven market developments, the region has seen signs of momentum. Recent figures from Allianz show health insurance premium growth across Asia outpaced the global average, rising by 12.6% compared to 7% globally.
Still, in most Asian countries – excluding markets like Taiwan – insurance penetration remains below 1% of GDP, signaling ongoing underinsurance and opportunities for expanded access.
To address these gaps, Swiss Re suggests that insurers explore bundled products that combine life and health coverage, potentially streamlining administration. More than 90% of survey participants indicated a preference against standalone life policies.
However, bundled offerings also introduce added complexity, making it important for insurers to clearly communicate product terms at the point of sale.
Preventative care services and severity-based insurance designs are also gaining traction. These approaches can help reduce long-term costs and more closely align payouts with policyholders’ medical and financial needs over time.
Alongside product design, insurers are encouraged to invest in communication strategies that enhance consumer understanding of coverage and clarify the role of insurance in financial protection.
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