Companies in South-east Asia are facing increased risk from threats ranging from floods to terrorist attacks, making it imperative for them to ensure they have adequate insurance coverage.

And experts say it is an ideal time for businesses to ensure their coverage is sufficient, as premiums are falling amid rising competition in the insurance sector.

A recent study by specialist insurance market Lloyd's showed that the economies of South-east Asia's 15 largest cities stand to lose some US$300 billion (S$420 billion) owing to threats over the next decade.

These include both natural and manmade threats, such as wind storms, market crashes, human pandemics, earthquakes, floods and terrorism. Lloyd's Asia-Pacific head Kent Chaplin noted that underinsurance is still a problem within the region, but told The Straits Times that increasing numbers of businesses are coming around to the idea of getting adequate insurance cover.

"Insurance market growth is outpacing GDP (gross domestic product) growth in South-east Asia and, as a result, insurance companies are writing more business," he said.

However, he added, insurance premium rates are low and in many classes still declining because of competition in the sector and an absence of major losses in these markets in recent years.

For example, in some countries in the region, property insurance rates declined by as much as 25 per cent last year, Mr Chaplin said.

"Given extensive competition in the insurance sector, we have not experienced increases in premium rates - quite the opposite, we are in a buyers' market at the moment."

Mr Mike Buffini, an associate partner at St James' Place Wealth Management Singapore, said he has seen the same trend play out while advising his clients, many of whom are business owners, on how best to protect their businesses from various risks.

"It is odd that the costs are often coming down as insurance companies are competing ever more fiercely for the business. Profit margins are being pared right down just to get the business onboard, so the savvy business owners can get a series of quotes and then counter each quote to drive prices ever lower."

Mr Buffini said he has seen rising interest among his clients in getting adequate insurance protection for their firms.

For example, more companies are now taking on kidnap and ransom insurance for their key executives who have to travel extensively in remote and often volatile locations, he added.

"And the rising piracy threat means companies are employing teams to protect their shipping or port facilities and they need to be insured against causing harm or death through the use of the firearms they carry."

Cybercrime is a growing threat that businesses are keen to seek protection from, he added.

"In Singapore, there is also a growing awareness that businesses need to protect themselves against the loss of key people through critical illnesses and sudden death."

Aon Risk Solutions regional director Nicholas Clarke said corporate insurance policies related to medical costs, such as workers' compensation and medical benefits, are seeing premium increases as the number of claims and costs per claim are rising quite rapidly.

However, other types of insurance are being "priced better", he said, as the standard of underwriting continues to improve in the region.

"For example, terrorism underwriters are getting better at understanding risk in specific parts of a country and the risk these pose to targeted locations."