Asia-based reinsurers are increasing their presence in mature overseas markets as part of efforts to diversify and manage underwriting cycles more effectively, according to a new report from AM Best.
AM Best described the move toward greater diversity as a positive development for the sector. The report found that most reinsurers in the AM Best Asia Reinsurance Composite recorded higher net income in 2024, with Chinese reinsurers showing the most significant gains.
Over the past 10 years, leading European reinsurers have identified the Asia-Pacific region as a key area for diversification and growth.
“Asia-Pacific reinsurers are following a similar strategy, significantly expanding abroad,” said Christie Lee, senior director at AM Best.
She noted that with economic momentum slowing in China and mature markets such as Japan and South Korea facing demographic and economic challenges, major North Asian reinsurers have increasingly looked to international markets to sustain growth and diversify risk.
The report highlighted that the composite’s weighted average return on equity ratio rose to 11.3% for 2024, supported by improved underwriting results and higher investment income, continuing the upward trend seen in 2023.
Reinsurers based in Singapore and across South and Southeast Asia reported strong earnings for 2024, which were broadly flat compared to the previous year but remained close to historic highs.
AM Best noted that lower catastrophe losses and higher investment income contributed to improved results for Asian reinsurers in 2023. The region’s reinsurers saw combined ratios improve from 94.5% to 91.6%, while return on equity rose from 0.1% in 2022 to 9.2%.
Reinsurance capacity in the region has been rebuilt amid adequate pricing, resulting in increased competition and oversubscription of treaties. In Japan, revenue from April renewals declined due to higher retention and rate reductions, a trend that could contribute to further softening in the Asia-Pacific market for January 2026 renewals.
Aon’s analysis of the 2025 reinsurance renewals found that sufficient capacity led to improved pricing and terms across most lines and regions. Reinsurers showed a greater appetite for high-margin lines and regions, and alternative capital reached record levels, with US$17 billion in catastrophe bonds issued in 2024.
This growth in alternative capital has provided insurers with more options for risk transfer and contributed to a more competitive market environment.
The adoption of IFRS 17 accounting standards is also changing how Asian reinsurers present their financial statements. According to AM Best, this shift affects key performance measures such as combined ratio and return on equity, introducing new components and comparability challenges.
While non-life reinsurers have seen minimal impact from the transition, life reinsurers have experienced more significant changes in their financial reporting.
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