Natural catastrophes, regulation, and AI reset APAC re/insurance
APAC re/insurance is entering a year of change. Growth cooled in 2024 and pricing eased into Q3 2025, while risk and regulation moved center stage. According to Gallagher Re's October 2025 Market Watch, mature APAC economies grew 1.4% (vs. 2.0% in 2023) and emerging markets hit 5.1% (vs. 5.4%), with non-life premium growth slipping to 6.0% (from 6.4%).
Global commercial rates fell 4% in Q3 2025-the fifth straight quarterly decline. The Pacific saw the steepest drop at 11%, while Asia and IMEA were down 5%. Capacity is back, competition is up, and reinsurance pricing is more favorable.
Pricing and growth: where the market stands
Inflation is easing and central banks are cutting rates. Good for the economy, mixed for insurers-lower yields can pressure investment income and ROE. Trade disruptions and shifting tariffs keep 2025 uncertain, yet APAC demand remains comparatively solid.
- Expect more price competition on better-performing lines and geos.
- Rate adequacy matters: push for technical pricing discipline despite softening.
- Revisit investment strategy as rate cuts roll through fixed income.
Nat cat exposure: higher stakes, smarter risk transfer
Typhoons, earthquakes, and urban growth in hazard zones are lifting exposure. Carriers are leaning into parametric covers, cat bonds, and tighter risk-based underwriting to keep volatility in check. Supervisors are also dialing up climate and resilience expectations.
- Expand event analytics: peril-level views, secondary perils, and urban sprawl mapping.
- Use parametric triggers to trim basis risk for peak zones and critical industries.
- Test cat bond capacity where traditional reinsurance is thin or peak load is lumpy.
- Align climate metrics with regulatory guidance; map portfolio hot spots to adaptation plans.
Regulation and capital: IFRS 17 and stronger solvency rules
Most APAC markets have implemented or are close to implementing IFRS 17, and enhanced risk-based capital regimes are raising the bar on solvency quality and disclosure. These shifts change how performance is measured and how capital gets deployed.
- Close IFRS 17 data gaps: cash flow granularity, discounting, and onerous contract tracking.
- Re-price for economic reality: reflect acquisition cost recovery and loss component signals.
- Tune product mix and reinsurance to capital charges under local RBC/ICS frameworks.
IFRS 17 overview * IAIS insurance capital standard
AI and distribution: where the growth sits
Digital distribution, embedded products, and AI-driven underwriting are moving from pilots to production. Gallagher Re points to growth lanes: health in India, Hong Kong, Vietnam; EVs and renewables in China, Singapore, Taiwan; and cyber in Australia, Singapore, South Korea.
- Underwriting: use AI for triage, prefill, and risk signals-keep human sign-off for high severity.
- Claims: straight-through for low severity; fraud analytics for frequency spikes.
- Distribution: embed microcovers at checkout and in app flows where conversion is highest.
- Governance: stand up model risk management, audit trails, and bias testing from day one.
If your teams need hands-on AI upskilling for underwriting, claims, and distribution, explore practical programs here: AI courses by job.
Reinsurance: capacity returns, selectivity stays
Capacity has improved after several hard years. That eases pressure, especially where primary rates are regulated. Still, reinsurers are choosy-clean data, disciplined underwriting, and strategy fit are the price of admission.
- Bring credible data: curated loss histories, exposure detail, and model transparency.
- Right-size structures: blend quota share, per-risk, and cat layers to smooth earnings.
- Use parametric and cat bonds to carve peak risk where it's most efficient.
- Enter new territories with a partner thesis: why you, why now, where you win.
What to execute in the next 90 days
- Portfolio: stress test nat cat and inflation scenarios; adjust aggregates and pricing corridors.
- Capital: re-run IFRS 17 and RBC sensitivities; reallocate capital to segments with better risk-adjusted return.
- AI: launch a controlled underwriting or claims use case with clear KPIs and model governance.
- Distribution: ship one embedded offer with a high-traffic partner; measure CAC and loss ratio in real time.
- Reinsurance: lock in early dialogues with reinsurers; pre-share data packs and renewal hypotheses.
The edge going into 2026
APAC can't bank on buoyant trade or breakneck development. Competition is rising, risk is more complex, and capital wants proof. As Gallagher Re puts it, quality is the currency of trust-portfolios built for resilience, tight execution, and clear risk signals will win more of it.
Your membership also unlocks:
