APAC reinsurance sees rate reductions: Gallagher Re

Pricing also softened in smaller Southeast and North Asian markets.

The hard reinsurance markets of 2023 and 2024 strained many Asia-Pacific (APAC) buyers, as reinsurance costs rose sharply, outpacing portfolio growth and creating affordability issues, Gallagher Re reported.

During the 1.1.2025 renewals, buyers took advantage of market conditions to realign reinsurance costs to more manageable levels. 

Limited demand from primary companies for increased limits, coupled with reinsurers’ focus on growing their Asian portfolios, pressured reinsurers to accept risk-adjusted rate reductions. 

This, combined with muted premium growth, led to significant reductions in monetary spending on reinsurance.

Even in loss-hit markets like Vietnam and Taiwan, post-loss rate increases were modest and below reinsurers’ expectations. 

Pricing also softened in smaller Southeast and North Asian markets, as well as in larger markets like Australia and New Zealand. 

The upcoming April renewals in Japan, APAC’s largest market, will test reinsurers’ ability to balance growth ambitions with maintaining current rate levels.