Taking on variable risk
The variable annuity business in Asia continues to attract banks and insurance companies. The potential market is of a staggering size which would far surpass the volumes in the US or Japan, the two biggest users of the products. Harry Thompson investigates the potential and rationale for improvements in the use of these insurance-based products
While the variable annuities (VA) market in Japan is second in size to the US, the rest of Asia includes only patchy activity. Several isolated deals in Hong Kong and Australia over the past five years have heralded little although the market in South Korea has provided more than a diverting exception. Market estimates for Korea stand at $19 billion, compared with $160 billion in Japan and $1.1 trillion in the US.
But insurance companies remain captivated by the numbers: there are 465 million
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