Reinsurers enjoy favourable pricing at April 1 renewals across APAC

The relatively low NatCat losses in the region led reinsurers to deploy more capacity.

The reinsurance market saw improved pricing for most insurers during the April 1 renewal period, a key date for Japan, South Korea, and India, according to Aon's Reinsurance Market Dynamics April 2025 Renewal report.

Favourable conditions, driven by strong capacity and reinsurer appetite, are expected to continue into the mid-year renewals.

April renewals in the Asia-Pacific region exceeded expectations, continuing trends from January 1. 

With relatively low natural catastrophe losses in the region, reinsurers deployed additional capacity, leading to significant rate reductions, particularly in Japan and South Korea.

Risk-adjusted property catastrophe rates saw double-digit declines, whilst previously challenged areas, such as per-risk covers, also benefited from improved pricing. 

The Los Angeles wildfires in January, expected to cost between $32b and $38b, had little impact on Asia-Pacific renewals.

The mid-year renewal period in June and July, covering the U.S., Australia, and New Zealand, is expected to maintain favourable conditions. 

Aon estimates global reinsurer capital reached a record $715b in 2024, supported by strong earnings and an expanding catastrophe bond market. 

Despite strong market conditions, uncertainties remain due to geopolitical and economic volatility, potential claims inflation, and catastrophe losses later in the year.

The first quarter of 2025 is expected to record the highest natural catastrophe losses in over a decade, with estimated ceded losses from the Los Angeles wildfires ranging from $11b to $17b. 

These losses have used up 25% to 33% of major reinsurers’ annual catastrophe allowances, which could influence mid-year market conditions.

Reinsurers remain highly capitalised and competitive ahead of mid-year renewals.

With supply still exceeding demand, insurers are securing capacity at favourable rates, exploring frequency protections, and adding coverage where needed. 

The mid-year period offers reinsurers a final major opportunity to meet 2025 growth targets and offset first-quarter losses.