Page 18 - Insurance Times March 2023

Asia-Pacific reinsurance loss-making lines, raising premiums, 2021 and is forecast to grow at a CAGR
and pushing for higher deductibles by of 4.1% over 2021–26.
growth to be hindered by
insurers. This in turn will prompt insur-
In China, reinsurers will benefit from
natural hazard losses and ers to increase premium prices and the new regulation on reduced entry
retention levels to make a reserve for
inflation in 2023 barriers. The regulation gives preferen-
higher deductibles. For instance, Aus-
tial treatment to foreign reinsurers if
With the Asia-Pacific (APAC) region’s
tralian insurer IAG, in its January 2023
their solvency regulatory system is rec-
exposure to extreme weather events
renewal of catastrophe reinsurance
ognized in China. After this develop-
leading to unsustainable natural haz-
programs increased retention by 75%
ment, Mapfre Re established a subsid-
ard losses and high inflation worsening
compared to July 2022.”
iary in China in 2022. China held a
them, reinsurers in the region will face
Aviation, marine, cyber, political vio- 25.6% share of the APAC’s ceded pre-
challenges in their growth in 2023, says
lence, and trade credit insurance lines miums in 2021. The ceded premium in
GlobalData, a leading data, and
are anticipated to remain vulnerable China is expected to grow at a CAGR
analytics company.
to the ongoing Russia-Ukraine war of 12.4% over 2021–26.
GlobalData’s insight report, ‘Reinsur-
losses in 2023. Insurers in the APAC
Mitra concludes: "In 2023, reinsurers
ance Market Size and Trends Analysis
region are also struggling to find suit-
in APAC will focus on risk management
by Region, Business Lines, Top Markets,
able coverage for war risks for ship-
and limit their loss exposure due to
Regulatory Overview and Competitive
ment of goods and natural gas supplies
the ongoing Russia Ukraine conflict
Landscape, 2021-2026’ reveals that
around the conflict zone as traditional
and high inflation. The long-term
APAC’s reinsurance sector is set to
reinsurers are exiting this line of busi-
growth, however, will remain stable
grow at a compound annual growth
ness.
due to favorable regulatory develop-
rate (CAGR) of 7.6% from $171.4 bil-
Mitra adds: “However, regulatory de- ments which will create new business
lion in 2021 to $246.8 billion in 2026 in
velopments across the APAC region opportunities for reinsurers.”
terms of ceded premiums.
would have positive impact on reinsur-
APAC’s top five reinsurance markets in
ance growth over the coming years.” Join
terms of ceded premiums are – Japan,
For example, reinsurance in Japan will
China, Australia, Hong Kong, and South Online Certificate Course on
benefit from the planned implementa-
Korea. They collectively held an 84%
tion of higher capital standards for in- Digital Trends in Motor
share of APAC’s market in 2021.
surers in 2025. The regulation is ex- Insurance
Deblina Mitra, Senior Insurance Ana-
pected to create demand for reinsur-
lyst at GlobalData, comments: “In-
ance as it will put pressure on life in-
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crease in cost of claims due to the high
surers to increase reinsurance to re-
inflation is adding pressure on
duce asset risks. Japan accounted for
reinsurers’ profitability. To reduce this,
35.2% of Asia’s ceded premiums in www.smartonlinecourse.co.in
reinsurers are limiting coverage on
The Insurance Times March 2023 15