Am best: APAC reinsurers have reversed the previous year's revenue decline, achieving a 4.0 per cent increase in net insurance service revenue in 2025, primarily fueled by their overseas business ventures.
According to BERNAMA News Agency, AM Best's recent Market Segment Report titled 'Asia in Focus: Resilience Through Transformation' reveals that the overseas market has been appealing to APAC reinsurers. This attraction is attributed to the higher concentration of non-proportional treaties in overseas markets, which allows reinsurers to capitalize on the favorable pricing environment that has been in place since the hard market began.
Christie Lee, AM Best's senior director, stated that "the broader improvement in underwriting profitability since the hard-market inflection point aligns with global reinsurance trends." However, the improvement's magnitude has been more moderate due to the Asian composite's higher share of proportional treaty business.
Underwriting perspectives show a slight increase in the composite's combined ratio by less than one percentage point, reaching 92.0 per cent in 2025. This increase is supported by improved rate adequacy and relatively benign catastrophe activity across Asia.
The report further highlights that Asia's renewal period in 2026 is poised to be buyer-friendly. With abundant capacity and decreasing rates, cedents can enhance protection and support growth while retention levels largely remain stable. Expectations for 2027 include continued rate easing on non-loss-impacted treaties.
Additionally, reinsurance capacity across Southeast Asia and India remains abundant, reflecting a robust appetite and confidence in the region's growth prospects. Despite elevated catastrophe claims, earnings remain supportive.
As market conditions in reinsurance become increasingly competitive, cedents are strategically refining their purchase programs and retention strategies. These refinements aim to achieve greater capital efficiency and earnings stability.
This report is part of AM Best's comprehensive analysis of the global reinsurance industry, coinciding with the upcoming Rendez-Vous de Septembre in Monte Carlo, scheduled for September 6.