Fitch Ratings believes the prompt response by most insurance regulators across the APAC region will help insurers weather some of their key business risks during the coronavirus crisis. Some insurers’ capitalisation, earnings and liquidity positions could come under pressure from the financial-market disruption and economic strain caused by the pandemic.
Fitch took negative rating actions, including Outlook revisions to Negative and downgrades, on over 30% of our APAC portfolio of publicly rated insurance companies with international scale ratings. Insurance regulators in most APAC countries have introduced measures to safeguard policyholder interests while ensuring industry resiliency. Most relate to policyholder protection, capital preservation and business continuity, supervisory relief to reduce the administrative burden on insurers and improvements to risk management, among other areas.
Fitch expects the regulators to continue introducing additional policy measures to the extent that the implications of the pandemic on the insurance industry will keep evolving. Fitch believes safeguarding policyholder interests will remain the ultimate objective of most APAC regulators. Almost all of them have directed insurers to provide relief to policyholders including premium deferrals, policy extensions, flexible interpretation of policy conditions, concessions on policy loans and mandatory introduction of special products.