APAC insurers brace for trade risks with strong capital buffers: S&P

Shocks will be widespread but will not be evenly distributed across the sector.

Asia-Pacific insurers are facing new macro-financial risks stemming from escalating trade tensions, according to a report released today by S&P Global Ratings. 

The report, titled “Asia-Pacific Insurance Mid-Year Outlook 2025: Strong Capital Buffers Dampen Tariff-Induced Volatility," highlights that whilst the impact of these shocks will be widespread, the effects will not be evenly distributed across the sector.

Despite the mounting external pressures, insurers in the region are entering this period with solid capital adequacy and stable credit fundamentals, which are expected to cushion the impact of tighter credit conditions.

S&P’s base case for 2025 anticipates ratings stability. However, the agency notes that several variables could still influence insurers' credit profiles.

These include fluctuations in investment valuations, volatility in foreign exchange markets, and supply chain disruptions tied to trade-related developments.