Asia’s Reinsurers Look West: Diversification Strategy Gains Traction - AM Best

KUALA LUMPUR, Aug 21 (Bernama) -- Asia’s reinsurers are actively expanding to mature overseas markets as part of a move to diversify and be more agile with underwriting cycle management, according to a new AM Best report.

AM Best senior director, Christie Lee in a statement said Asia-Pacific (APAC) reinsurers are following a similar strategy, significantly expanding abroad.

Lee added that major North Asian reinsurers, particularly those from China, Japan, and South Korea, are increasingly expanding overseas to sustain growth and diversify risk amid slowing domestic momentum and demographic pressures.

AM Best views the move to diversify as credit positive. The report also notes that the majority of reinsurers within AM Best’s Asia Reinsurance Composite posted higher levels of net income in 2024, with China’s reinsurers experiencing the most notable gains.

Over the past decade, the major European reinsurers have identified the APAC region as a key source for diversification and growth.

The report also highlighted that the composite’s weighted average return on equity ratio improved to 11.3 per cent for 2024, supported by stronger underwriting results and higher investment income, thus extending the improving trend from 2023.

In addition, reinsurers based in Singapore and throughout South/Southeast Asia reported strong earnings for 2024 that were broadly flat year-on-year but still near historic highs.

The report, “Asia in Focus: A Two-Way Street for Reinsurance Diversification”, is part of AM Best’s overall look at the global reinsurance industry ahead of the Rendez-Vous de Septembre in Monte Carlo.

Other reinsurance-related reports, including AM Best’s ranking of top global reinsurance groups and in-depth looks at the insurance-linked securities, Lloyd’s, life/annuity, health and regional reinsurance markets, will be available during August and September.

-- BERNAMA