It’s an intriguing region for insurance industry watchers and the biennial convention reflects the diversity on offer.

On the one hand, there are representatives from mature and sophisticated insurance markets such as Japan, Singapore and Taiwan. On the other, there are chief executives from important emerging markets such as the Philippines, Indonesia and Vietnam.

Reflecting the importance of the region to the market, Lloyd’s will be represented by many delegates.

Although the convention is to be hosted this time around by the Hong Kong Federation of Insurers, on the doorstep of what is potentially the world’s biggest market, China is unlikely to dominate discussions.

Instead, discussions will revolve around issues that are also central to insurers in the Northern hemisphere: climate change and terrorism. A lot can happen in two years.

Like Europe and North America, Asia Pacific has been hit by its share of nat cats and the strongest typhoons are getting stronger.

Cyclone Nargis, which hit Burma in May, left as many as 150,000 dead. Earthquakes are also an issue, especially after the devastating Sichuan disaster in China.

Japan and Taiwan also have significant earthquake risk.

Terrorism is as pervasive in eastern Asia as anywhere else in the world and Lloyd’s 360 Risk event Terrorism in Asia  in February pointed up the growing threat of local insurgencies in the region.

There is no mention in the conference programme of turmoil in the financial markets and the effect it might have on insurers in the region. Though with local stock markets still suffering on the eve of the conference, it’s certain to be a topic of conversation.

Alex Faris, Lloyd’s general representative for Hong Kong, told me that with global insurers so active in the region, the financial crisis and its wider fall-out is certain to be a talking point.

“Marine business is also affected in the region, with problems in ship financing and the decrease in value of fleets, as well as the associated drop in cargoes at present,” Alex said.

Insiders believe that the industry has sufficiently strong fundamentals to withstand the current turmoil in the financial markets, though it is likely to see its profits eroded.

In a report of five markets with rated insurers (‘Asia’s Insurance Industry Can Shake Off The Negative Effects Of The Recent Market Turmoil’) Standard & Poor’s Ratings Services credit analyst Connie Wong says the industry’s operating performance is likely to deteriorate in 2008 and some companies may even report losses due to plummeting investment profits, slowing new-business sales, and falling confidence among policyholders.

“But we expect the rated insurers that have strengthened their balance sheets over the past five years to ride out the storm without major rating changes and believe that the sector’s strong growth potential will remain intact over the medium term,” Ms Wong said.

“The capitalization of most rated insurers has been hit by declining profits or a reduction in investment evaluation reserves. However, we believe these setbacks are still manageable and will not affect most ratings due to adequate capital levels for the current ratings. But if market conditions deteriorate, insurers that have thin capital buffers will prove vulnerable,” said Ms. Wong.

Another subject not on the conference agenda this year is talent. The scarcity of talent available to fill executive positions in the insurance sector is a growing problem in the US, Europe and Bermuda. In competition for smart individuals with other parts of the financial services sector, Asia’s insurers could soon be facing its own intellectual capital crunch.

“Insurance is considered a poor cousin of the banking industry in Asia as well and we have been struggling to find good people to join the industry,” says Jon Song, Associate Director of Lloyd’s Asia in Singapore.

In tandem with the General Insurance Association (GIA) in Singapore, Lloyd’s is taking steps, however, Jon says. “These include a talent outreach project (to inform students and young professionals of the insurance industry), numerous career fairs and profiling talks; and lastly a global internship programme.”

This is important. As the financial markets stabilize and the tiger economies re-sharpen their claws, places like Singapore and Hong Kong are likely to become even bigger insurance hubs, catching up with London and Bermuda, Zurich and New York. And they will all be competing for the same people.

So the problem facing East Asia’s insurers in the future could be two fold: first attracting the best local people into the industry—and then keeping them close to home.