Asian reinsurers expanding overseas as global players deepen regional roots – AM Best

Asian reinsurers are increasingly looking overseas to balance portfolios and sustain growth, even as international groups strengthen their presence in the region, according to a new AM Best report.

The study, “Asia in Focus: A Two-Way Street for Reinsurance Diversification”, notes that leading Asia-Pacific reinsurers have more than doubled their overseas premium share since 2010, with the US and Europe now accounting for close to 30% of their portfolios.

China Re and Taiping Re have led the charge, while Peak Re has recently established a Bermudian subsidiary to underwrite US motor and casualty business.

Christie Lee, director, AM Best, said: “Diversification abroad not only supports growth but enhances capital efficiency and cycle management, which we view as credit positive.”

The report highlights that Japanese and Korean groups are also expanding internationally.

MS&AD’s acquisition of Amlin, Sompo’s creation of Sompo International, and Samsung’s increased stake in Canopius all illustrate a strategic focus on reinsurance as a growth pillar.

Earnings resilience

The AM Best Asia-Pacific reinsurance composite showed stronger underwriting results in 2024, with combined ratios improving to 91.4 from 92.5 the previous year.

Net income was higher for most players, particularly Chinese reinsurers, aided by benign catastrophe activity and strong investment income.

Shareholders’ equity rose 3.8% in 2024, following a near 21% increase the year before, supported by hybrid debt issuance and retained earnings.

Alternative capital also featured, with Taiping Re and Peak Re issuing catastrophe bonds in 2025. These structures expanded protection across US, Japanese, Chinese and Indian perils, underscoring a growing role for ILS in Asian markets.

Despite these improvements, the composite still lags European peers on profitability.

AM Best attributes this to a more property-heavy portfolio and shorter liability duration, which limits discounting benefits under IFRS 17.

Regional market dynamics

Japan’s April 2025 renewals signalled softening after years of rate hardening, with Howden Re reporting 10–15% risk-adjusted rate cuts on catastrophe programmes.

Cedents have increased retentions, shrinking the premium pool and raising the likelihood of further softening at January 2026 renewals.

ILS activity remains robust, with Sompo Japan securing $150m through its latest Sakura Re deal and Zenkyoren launching Nakama Re, a $100m earthquake bond.

In South Korea, IFRS 17 and the Korean Insurance Capital Standards have driven demand for capital solutions, including coinsurance and mass lapse reinsurance. Several high-profile transactions with local life insurers underline reinsurers’ role in easing solvency pressures.

Taiwan diverged from the regional trend of softening, with reinsurers pushing through rate increases following back-to-back earthquakes in 2024 and 2025, many of which impacted high-tech and semiconductor exposures.

China’s market remains broadly stable, with strong demand in agriculture, health and liability lines, although reinsurers are cautious over electric vehicle exposures.

South and Southeast Asia continue to post resilient earnings, with Singapore-domiciled reinsurers reporting solid underwriting profits.

However, growing capital inflows and frequent treaty oversubscription are creating competitive pressures that could limit margins as pricing momentum softens.

India has emerged as one of the most dynamic markets. Regulatory reforms granting foreign reinsurers greater market access have expanded international participation.

This has supported a competitive renewal environment, with treaty placements often oversubscribed and cedents benefiting from improved access to both capital and expertise.

AM Best concludes that global expansion by Asian reinsurers is broadly credit positive, improving diversification, capital efficiency and long-term resilience. Yet the report cautions that abundant capacity and early signs of softening across parts of the region point to a tougher test of pricing discipline ahead.