Steady economic momentum across the Asia Pacific economies, led by China, is driving demand in the region’s insurance sector, according to Moody.
Together with the solid solvency levels of insurers, these factors support a stable outlook for the region’s insurance sector for 2018.
Insurers have also adapted to low interest rates by shifting to less interest-sensitive products and increasing their allocations to higher-yielding non-traditional assets, although for some -- such as Chinese insurers – the latter has resulted in rising asset risk.
Moody's outlook for sovereign creditworthiness in Asia Pacific in 2018 is stable overall, reflecting a favorable growth environment that will amplify the credit benefits of past reforms and encourage some sovereigns to implement further measures, particularly in the emerging markets. This favorable environment balances high leverage in various sectors, which continues to represent a credit constraint for many sovereigns in the region.
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