How can Asia-Pacific reinsurers tackle rising disaster losses?
They still posted steady growth over the past five years.
Asia-Pacific reinsurers collected $58.6 billion in premiums in 2024, down from $60.2 billion a year earlier, as some companies changed the way they report their earnings.
China remained the biggest market in the region, accounting for almost half of total premiums, a concentration that GlobalData Plc expects to continue.
Despite the decline, the region’s reinsurers posted steady growth over the past five years, reflecting the expanding demand for coverage across Asia.
The five biggest firms captured more than 70% of the market. China Reinsurance (Group) Corp. led the pack, though its share dipped slightly.
Other major players, including PICC Reinsurance Co. Ltd in China, Korean Reinsurance Co., India’s General Insurance Corp., and Japan’s Sompo Holdings, Inc. had mixed results, with some posting gains and others experiencing small declines.
Japan’s MS&AD Insurance Group Holdings, Inc. posted the strongest annual premium growth from 2020 to 2024 at 22.6%, followed by PICC Reinsurance Co. Ltd. at 16%.
Natural disasters continued to challenge the sector. A 7.7-magnitude earthquake struck Myanmar, flooding hit parts of China, India, and Southeast Asian nations, and Typhoon Wutip affected Beijing.
Hong Kong also recorded a fatal apartment fire, exposing gaps in protection and highlighting the risks of concentrated exposures.
Analysts said much of the region remains underinsured. Last year, only about 11.5% of economic losses from natural catastrophes in the Asia-Pacific region were covered, equivalent to about $10b of the $87b total loss, according to Arthur J. Gallagher (UK) Ltd.
Reinsurers are increasingly turning to innovative solutions to manage risk, including catastrophe bonds, parametric insurance, and artificial intelligence (AI)-powered modelling that uses satellite imagery and environmental data. Automation is also helping streamline underwriting, claims, and policy management, letting specialists focus on more complex decisions.
The market’s challenges underscore structural limitations in the region, where rapid economic growth and rising disaster risks outpace insurance penetration. Analysts suggest expanding coverage, improving data and modelling capabilities, and promoting public-private partnerships to narrow the protection gap.
Questions to ponder:
- What structural or regulatory challenges limit Asia-Pacific’s share of global reinsurance?
- How do reinsurers plan to maintain profitability amid slower premium growth?
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EXPERT OPINION
Writing from Fiji and the Pacific, the protection gap is something we see firsthand in communities that rebuild slowly, or sometimes not at all.
Asia-Pacific suffered around $91b in disaster losses in 2024, yet only $16b was insured. Typhoon Yagi devastated parts of Vietnam, the Philippines, and China with around $14b in losses, with only about $1b covered. Even mature markets such as Australia still face cyclone affordability challenges significant enough to require a government-backed reinsurance pool.
Practical solutions exist. Expanding parametric insurance, catastrophe bonds, and regional risk pools may help close the gap. Reinsurers should also co-invest in better regional catastrophe modelling, because poor data leads to weak triggers and delayed payouts, which ultimately erodes trust.
The tools already exist. What Asia-Pacific needs now is the commitment to deploy them at scale.
There are several ways in which Asia Pacific insurers may tackle the rising disaster losses. Firstly, a shift from reduction to resilience is critical where risks can be priced to encourage client resilient constructions and land usages. Offering risk engineering services to clients and investing in green assets to reduce longer term client risk exposures are other alternatives of how this could be achieved.
From a technical perspective, enhancing catastrophe risk modelling and data would be key. Building APAC-specific models, refining frequency and severity of forecasts by integrating IOT, AI, satellite and client data, as well as adopting parameter triggers can enable more streamlined and objective payouts.
Reinsurers may also want to consider diversifying capital and risk transfers by participating in regional risk pools, issue catastrophe bonds and insurance-linked securities to tap into global capital markets etc.
Leveraging technology by deploying AI automation for activities such as underwriting, claims and portfolio management, developing digital platforms for live alerts and policy management, and applying remote sensing tools for rapid loss assessment can all lead to improved speed and efficiency.
Lastly, strengthening cross border and public-private partnerships can also help. For example, collaborating with governments across the region on standards setting, co-designing national catastrophe protection programs and partnering with direct carriers to penetrate the parametric & microinsurance markets for the less mature locations are some examples for consideration.