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Property reinsurance pricing rises by up to 20% in 1 Jan season

Property reinsurance pricing on loss free risk and CAT programmes in ASEAN and China varies from +15% to +20% risk adjusted, and even larger increases are seen in Taiwan and Korea, says Gallagher Re in its January 2023 "1st View Market Report" released on 1 January.

The report, outlining market conditions at key reinsurance renewal seasons—1 January, 1 April and 1 July—which are based on the real-time observations of Gallagher Re’s brokers, also says that there has been an inconsistent application of deductible increases, primarily imposed on loss impacted placements.

Other findings were:

  • All peril coverage remains a common feature and existing hours clause wordings have been largely maintained.

  • Rarely, shortfall terms have been imposed on proportional and excess of loss contracts.

  • Proportional placements renewed with limited changes; commissions changed by low single digits. However, there was very limited additional capacity.

  • Regional Retro deductibles increased significantly (usually dropping first layers) and pricing was up across the board, however, access remained to worldwide capacity and coverage.

  • Risk covers with existing CAT coverage were renewed with no additional restrictions.

  • Pre-paid reinstatements moved to paid for both risk and CAT contracts.

The January 2023 report indicates the conditions in specific markets in Asia, including:


In Indonesia, financial issues with domestic reinsurers resulted in some cedants shifting capacity to overseas reinsurers. Local lead reinsurers pushed through an overall increase in pricing and tightening of proportional terms (less inward facultative capacity) whilst also reducing reinsurance commission.

Excess of loss pricing increases varied considerably depending on clients and results—in some cases deductibles increased albeit not in a meaningful way.

South Korea

In South Korea, significant loss activity over the past 12 months (both risk and event) resulted in a meaningful hardening of pricing and terms with several reinsurers exiting the market entirely.

The appetite for proportional reduced substantially with reinsurers only willing to offer quota share support going forward (most surplus structures disappeared).

This renewal has seen the introduction of broad sliding scales of commission, loss participation clauses and loss ratio caps.

There was a new introduction of the co-insurance limitation clause which limits the treaty capacity in case of co-insuring an underlying risk with one or more primary insurers.

Excess of loss pricing increases varied considerably depending on individual contract loss position.


In Malaysia, there was a similar market reaction to that seen at 2022 1 April and 1 July renewals with 1 January buyers renewing for the first time post the Malaysian flood.

A meaningful reduction in reinsurance commission on proportional was seen, with an average of -9% reduction (between -3% to -16.5% reduction) and tightening of retention tables across all cedants.

Loss participation clauses are now commonly in place – most triggered at 100% loss ratio with cedant participation between 30% and 50%.

Excess of loss pricing increased and was dependent on loss record.

Overall, deductibles remained unchanged although some cedants chose to have them increased to manage costs.



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