Carriers
APAC Reinsurance Buyers Gain Leverage as Market Softens, but Risk Still Drives Outcomes
By Insurance Wire Staff, . Insurance Wire.
Reinsurance buyers across Asia Pacific are getting more options and more competitive pricing, but the improvement is uneven and the underlying risks have not changed, according to Tom Curtis, Partner, Specialty and Reinsurance Consultancy, and Gary Moran, Senior Partner, Aviation and Transportation, at OneGlobal, a specialty reinsurance broker. Reinsurance News published their assessment ahead of the Singapore International Reinsurance Conference.
Reinsurance is the insurance that insurers buy for themselves, spreading risk across global markets so that no single carrier bears the full weight of a large loss. When that market softens, as it is doing now across much of Asia Pacific, buyers pay less and have more carriers to choose from. But Curtis and Moran are careful to separate the pricing cycle from the risk environment.
"Capacity may be readily available today, but catastrophe exposure, supply-chain dependencies and geopolitical uncertainty still require careful assessment," they said.
What the soft market actually offers
For buyers willing to look beyond rate, the current conditions open up real structural improvements. Curtis and Moran pointed to additional limit, better reinstatement terms, broader coverage and more affordable protection against frequent smaller losses as options now within reach.
"For clients, this is a valuable opportunity to revisit what their reinsurance programme needs to achieve and whether that intention delivers the required outcomes. Price matters, but so does the quality of protection, the reliability of counterparties and how the programme responds when several exposures are impacted by the same event," they said.
The firm sees facultative reinsurance, which covers individual risks placed outside a carrier's standard treaty program, as a particularly useful tool in this environment. "Used well, it helps local insurers to use capital more efficiently, manage concentrations and accumulations, and write complex risks that sit comfortably alongside their treaty programmes," Curtis said.
One caution runs through the advice: reinsurer quality matters more, not less, when capacity is plentiful. "What is critical in soft market conditions is the management of security," Curtis said, adding that the firm's relationships across Asian and global markets allow it to place risks without compromising on counterparty quality.
Where the gaps are
Across the region, economic growth is generating exposures that existing insurance arrangements do not fully cover. OneGlobal identified a long list of specialty lines where demand is outpacing domestic capacity: technical property risks including metals processing, agribusiness and mining; dedicated data center insurance; sabotage and terrorism and political violence; marine hull and cargo; energy across upstream, midstream and downstream; renewable energy; aviation and aerospace; construction and engineering; cyber and digital assets; and transactional risks tied to mergers and acquisitions activity.
Some of those lines have meaningful local capacity. Others, including sabotage and terrorism, aviation, renewable energy, data centers and transactional risks, depend heavily on international reinsurance support, the executives said.
Aviation is under particular pressure. Supply-chain disruption is inflating claims even as fleets grow, and risks spanning hull, liability and war remain international by nature. Digital assets present a newer challenge, with specialist underwriting knowledge needed to address gaps around custody, crime and liability.
Changing supply chains are also creating demand for coverage that follows goods and storage arrangements across borders, including losses that arise without any physical damage to cargo, a category that traditional marine policies often do not reach.
What underwriters should watch
For carriers writing into these lines, the executives offered a pointed reminder: "Premium growth alone is a poor measure of success in a softening market." Understanding the risk, setting clear coverage boundaries and managing accumulations are what determine whether a book holds up when conditions turn.
The harder question for buyers and underwriters alike is how programs built in today's soft market will perform when pricing eventually hardens again. Curtis said the starting point is understanding a client's business plan and risk tolerance, then testing structures across international markets. "The best outcome is a programme that supports underwriting ambitions today, and which will remain robust when market conditions inevitably change."
For brokers and carriers active in Asia Pacific specialty lines, the practical review is whether current program structures are taking advantage of available terms, not just available price, and whether the reinsurers on the panel will be responsive when multiple exposures are hit by the same event.
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