The reinsurance market in the Asia-Pacific (APAC) region is expected to grow at a compound annual growth rate (CAGR) of 4.8%, increasing from an estimated US$54 billion in 2024 to US$68.4 billion in 2029, according to GlobalData. This growth is driven by stable pricing and rising demand for catastrophe coverage.
GlobalData's 2024 latest report shows that APAC accounted for 13.3% of global reinsurance premiums in 2023. In 2024, the market saw stable pricing conditions, marking a shift from the harder market of the previous year.
Several factors are driving the growth of the APAC reinsurance market, including strong demand from both mature and rapidly expanding insurance markets in the region. Reinsurers are also increasingly focusing on underwriting catastrophe risks, which is supporting the market's expansion.
In addition, regulatory developments such as the implementation of new risk-based capital regimes in Hong Kong and climate risk stress tests in Malaysia are enhancing market resilience.
Additionally, a vacuum left by Russia is expected to drive the sector forward, as primary insurers in Central and West Asia are increasingly entering international reinsurance markets to diversify beyond domestic operations and build a presence abroad.
However, while this shift offers a pathway to expand market profiles through potential profitable growth, a report from AM Best notes that it also introduces substantial risks, particularly for companies lacking the technical capabilities or understanding of the markets into which they are expanding.
Swarup Kumar Sahoo, senior insurance analyst at GlobalData, said that the APAC reinsurance market is set to experience steady growth due to disciplined pricing strategies and selective risk management.
The adoption of the International Financial Reporting Standard (IFRS) 17 in countries like Japan and South Korea has contributed to stable returns on equity, reinforcing the market’s stability. However, Sahoo also highlighted that the region’s vulnerability to natural disasters and economic uncertainties presents ongoing challenges for reinsurers.
The growing cyber-insurance market presents a significant opportunity for reinsurers in the APAC region. The global cyber-insurance market is projected to increase by 8%, reaching US$16.6 billion in premiums by 2025, according to Swiss Re.
Despite this growth, there remains a large cyber protection gap, which indicates ample room for expansion in the APAC market, where it currently accounts for just 8% of global premiums. Additionally, demand for agricultural and natural catastrophe coverage in China is expected to rise as the country’s primary insurance market matures.
Sahoo further noted that reinsurers in the region are increasingly adopting advanced technologies to improve operational processes and risk evaluation. Technologies like artificial intelligence (AI), the Internet of Things (IoT), and machine learning are enabling the development of new products and enhancing risk assessments for specific perils.
These innovations are critical for addressing the challenges posed by climate change and emerging risks.
The APAC reinsurance market is also witnessing increased interest in Insurance-Linked Securities (ILS), with Hong Kong emerging as a key hub. This development is expected to provide support for market growth and stability, though the potential of the ILS market in the region will depend on further progress and increased participation from local investors.
Sahoo emphasized that technological advancements and regulatory changes will play key roles in shaping the future of the APAC reinsurance market. While natural catastrophe risks and the growing importance of cyber insurance will continue to influence market dynamics, the region’s reinsurers are well-positioned to capitalize on these trends and sustain growth over the coming years.
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