Disaster strikes are actually helping drive Asia's insurance industry

Dark clouds are pictured over the skyline of Hong Kong island as Typhoon Usagi approaches the territory on September 22, 2013. Severe Typhoon Usagi barrelled towards Hong Kong on September 22, shutting down one of the world's busiest sea ports and throwing flight schedules into disarray from Europe to the United States.

Asia's vulnerability to natural disasters is helping drive the insurance industry in the region, an international conference in Singapore heard Wednesday.

Rising affluence resulting from strong economic growth and the region's expanding ranks of the elderly are the two other major factors expected to boost the industry, Singapore's central bank chief told the conference.

"The prospects in Asia are especially bright. The Asian risk landscape is transforming rapidly, generating robust demand for insurance and reinsurance," said Ravi Menon, managing director of the Monetary Authority of Singapore.

He said in a speech at the Singapore International Reinsurance Conference that the insurance business in Asia is projected to grow at about 8.0 percent per year over the next decade.

By 2020, Asia is forecast to account for almost 40 percent of the global market, he added.

One major driver is Asia's vulnerability to natural calamities, Menon said, pointing out that the region accounted for 52 percent of global economic losses from disasters between 2000 and 2009.

In 2011 alone, Asia accounted for 81 percent of global economic losses and only about 35 percent were insured, he said.

"A growing risk awareness, coupled with rising asset values, will lead to greater demand for catastrophe insurance and reinsurance, including alternative risk transfer solutions," Menon said.

"Following the 2011 catastrophes, several Asian countries have already established insurance pools for catastrophe risks."

Asia's continued robust economic growth and its ageing population will also help power the insurance industry ahead, Menon said.

He cited data showing that by 2050, the Asia Pacific region will be home to 62 percent of the world's elderly population, with one in four persons aged 60 and above.