[By NBC-1TV H. J Yook]Investor interest in Asian insurance and reinsurance markets is escalating as opportunities in U.S. domestic markets decline due to saturation and aggressive competition, Gregory Nelson, Senior Vice President, U.S. RE Securities, LLC told the Eighth Annual Philippine Non-Life Summit, here last week.

“Higher GDP growth, low insurance penetration, a growing middle class, and market liberalization are driving investors to focus on Asia,” Nelson reported. “Despite declines in fund raising, U.S. private equity firms have hundreds of billions of dollars of capital available to invest worldwide and are increasingly looking to partner with reliable co-investors with experience in the region to invest alongside,” he said. Nelson noted that reinsurers are partnering selectively with private equity firms seeking opportunities in the Far East.

The growing number of initial public offerings in the Asian insurance sector reflects strengthening demand, according to Nelson. He pointed out that 2010 was a record year with over $30 billion in Asian insurance IPOs contrasted to the U.S. where there has only been a handful of insurance industry IPOs since 2007. “China listed companies continue to comprise the largest share of the recent insurance IPOs in terms of number and volume in the region but even mature markets such as Korea are seeing increasing insurance capital markets activity,” Nelson stated.

Insurance-linked securities as an alternative asset class should also garner increasing acceptance by Asian institutional investors over time, he told insurance leaders attending the Conference.