1 April reinsurance renewals progressed in an orderly fashion in Asia Pacific, as the reinsurance market found itself on a more sustainable footing, says Aon, a leading global financial services and risk solutions company.
In Its “Reinsurance Market Dynamics April 2023” report, which provides a comprehensive assessment of key market trends in the context of the 1 April 2023 renewals period, Aon said, “Following a turbulent 1 January, reinsurers and insurers in APAC navigated a challenging environment to achieve a pragmatic outcome at the 1 April renewal.”
1 April is a notable renewal for the APAC region, dominated by Japan, a globally important insurance market, and home to some of the world’s largest catastrophe reinsurance placements. There are also significant renewals in South Korea and India, including major crop reinsurance programmes.
Some countries in APAC have historically been somewhat immune to the reinsurance market cycle, says the report. And while the demand-supply dynamics that shaped the January renewals continued into April, the consequences were more moderate.
Capacity was sufficient to meet demand, and while there were few new entrants in APAC, many established reinsurers were willing to deploy more capacity.
Broadly speaking, pricing for catastrophe covers and retention levels increased, but not to the levels seen in the US and Europe at 1 January. Japan, in particular, benefited from price corrections implemented in response to recent catastrophe events.
Across the region, insurers also leveraged catastrophe modelling and analytics to present a custom view of risk, helping to attract capacity and negotiate more favourable terms.
Attention now turns to mid-year property catastrophe renewals in APAC, in particular Australia and New Zealand, which have both experienced unusually large catastrophe events since the last renewal. Although challenging, Aon says it anticipates capacity available at a price at the mid-year renewal for the APAC region.