APAC insurance stability bolstered by strong risk management

87% of the APAC rating units had stable outlooks at the end of 2023. 

Asia Pacific’s (APAC) mature markets benefited from stable economic conditions and stronger risk management practices, whilst emerging markets, despite lower insurance penetration, tend to offer simpler insurance products with less chance of adverse claims development, according to AM Best.

Despite elevated catastrophe activity, 87% of the APAC rating units had stable outlooks at the end of 2023, with New Zealand and Singapore leading positive outlook revisions. 

The report, “APAC Benchmarking: Positive Signs Whilst Navigating Climate and Geopolitical Uncertainty,” shows that eight Long-Term ICRs were upgraded and four downgraded. 

Downgrades were primarily due to falling Best’s Capital Adequacy Ratio (BCAR) scores and weakening operating results. AM Best also assigned 10 new ratings in the region during the year. More than 75% of AM Best’s ratings in Asia-Pacific carried a Long-Term ICR of “a-” or higher, with mature markets performing better than emerging markets. 

AM Best’s ratings in the region cover a variety of entities, including reinsurers, insurers, mutuals, captives, credit and health insurers, takaful operators, and protection and indemnity (P&I) clubs.