The outlook for the APAC insurance sector in 2025 is maintained as "Neutral', supported by stable operating margins and strong solvency buffers, says Fitch Ratings.
In the report, titled "APAC Insurance Outlook 2025”, Fitch says that life insurers are aiming for quality growth and solvency through cautious investment strategies, while non-life insurers focus on efficiency and expense control.Insurers in various markets are preparing for new solvency regulations, supported by ongoing capital-raising activity, including debt issuance.
Fitch expects a stable performance despite challenges from lower investment yields and regulatory changes. Non-life insurers will benefit from premium rate hikes, although risks from extreme weather and rising reinsurance costs pose risks to earnings and capital. Life insurers will continue to seek product profitability amid evolving regulations.
The sector will navigate challenges such as investment volatility, regulatory changes, and catastrophe claims through proactive measures in underwriting efficiency, capital management, and dynamic asset-liability management. Economic growth and regulatory measures will drive steady growth, with insurers focusing on higher-margin products and rate increases to manage rising claim costs.
Overall, the APAC insurance sector is poised to manage the anticipated challenges effectively. The focus remains on maintaining a stable performance through efficient operations and strong capital management. Regulatory changes, extreme weather activity, and investment-market volatility are key factors influencing the outlook, but the sector's robust capital position and strategic initiatives will support stability and growth.
Source: asiainsurancereview.com
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