Asia shies away from savings to protection products

This is to align with ICS and IFRS 17 standards.

For 2025, insurers in Asia-Pacific are expected to shift focus from savings policies to better-margin protection products, aligning with ICS and IFRS 17 standards, according to CreditSights, a Fitch Solutions company. 

Japanese life insurers are likely to continue overseas acquisitions, particularly in the US, whilst Hong Kong insurers prioritise organic growth in Asia. 

Interest rate movements will also shape market dynamics, with expected hikes in Japan supporting growth and solvency ratios, whilst further rate declines in Taiwan, Korea, and Hong Kong could pressure returns and growth.

Regulatory changes and foreign exchange risks will remain key concerns. 

Korean insurers face tighter lapse risk treatment and discount rate adjustments under the K-ICS framework, whilst Taiwan prepares to implement a new solvency regime by 2026. 

Additionally, the depreciation of the US dollar poses risks for Taiwanese and Japanese insurers with large overseas investments.
In terms of investment opportunities, Nippon Life, Meiji Yasuda, and QBE Insurance stand out with outperform recommendations.

Conversely, Kyobo Life and Cathay Life are underperforming. Kyobo Life faces valuation pressures amidst regulatory and market challenges, whilst Cathay Life’s tight spreads and lower solvency ratios limit its appeal relative to Japanese and Korean peers. 

Looking ahead, the primary market will likely see increased activity in Japan and Hong Kong, with notable issuers such as Nippon Life and AIA leading refinancing efforts. 

Taiwanese insurers are also expected to issue dollar bonds to meet new solvency and accounting requirements, whilst South Korea may focus on local currency debt due to stricter regulatory demands.