Trade barriers limit cross-border ASEAN reinsurance flows

ASEAN retains around 68% of non-life premiums overall, but retention varies widely.

ASEAN insurers retain most non-life premiums, but still rely heavily on global reinsurers for large and complex risks such as property, engineering, aviation and marine hull, according to Malaysian Re's ASEAN Insurance Pulse report.

The report found ASEAN retains around 68% of non-life premiums overall, but retention varies widely by market and line of business. 

Motor insurance is largely retained, with ratios ranging from 98.4% in Indonesia to 84.2% in Singapore. 
Retention is much lower for complex risks, ranging from 11.8% for aviation in Vietnam to 57.6% for marine hull in Singapore. 

Property and engineering also show below-average retention due to major project scale and high exposure to natural catastrophe risks. These lines account for a large share of premium outflows, from 38% in Singapore to 62% in Vietnam.

The report said domestic capacity remains too small to absorb large and volatile exposures, and the risk of large correlated catastrophe losses across markets limits insurers’ willingness to retain more risk. 

It also highlighted gaps in catastrophe modelling, exposure data and actuarial expertise across ASEAN, which affects pricing and risk management.

ASEAN’s non-life insurance penetration remains modest. Singapore, Thailand and Malaysia have penetration rates of 1.8%, 1.9% and 1.4%, respectively, below the European Union’s 3.0%. 

Vietnam stands at 0.7%, whilst Indonesia and the Philippines are both at 0.6%. 

In 2024, Thailand was ASEAN’s largest non-life market with gross written premiums of about $7.9b. 

Brunei and Cambodia were among the smallest, at $92m and around $156m, respectively.

The report also flagged trade barriers that limit cross-border re/insurance activity. 

Formal barriers include foreign ownership limits, mandatory cessions to state reinsurers, capital localisation requirements and domestic placement rules. 

Informal barriers include administrative delays and inconsistent regulatory discretion. Whilst some protection is seen as helpful in less mature markets, the report said foreign expertise and capacity remain necessary for large, complex risks.

It said ASEAN could strengthen resilience and retain more premiums through deeper regional cooperation, including risk pools and alternative capital solutions such as catastrophe bonds, alongside improved catastrophe modelling capability. 

The ASEAN Insurance Council was highlighted as a key platform supporting collaboration, including initiatives such as the ASEAN Renewable Energy Pool.