Asia sees rate reductions, Japan maintains firm pricing: Aon

Underwriting remains disciplined across Asia, particularly in Japan. 

The insurance market in Asia is seeing broad softening across most product lines and regions, though exceptions remain, according to Aon’s Q4 2024 Global Insurance Market Insights Report.

The pricing gap between international and domestic insurers is widening, and market softening is expected to accelerate in 2025 as competition for preferred risks increases.  

Capacity for energy transition remains a key issue for insureds, insurers, and regulators.

Japan continues to face a difficult market, with capacity constraints and pricing pressures expected to persist into 2025 as insurers focus on profitability.  

Pricing remains competitive in most of Asia, with rate reductions achievable for desirable risks. Japan remains an exception, where pricing remains firm. 

Capacity is ample across the region, driven by competition from international insurers and new market entrants. 

However, Japan's capacity is constrained for Property and Casualty lines. Following recent flooding, the Thai market is expected to introduce measures to manage Natural Catastrophe exposures.  

Underwriting remains disciplined across Asia, particularly in Japan. 

Insurers show flexibility for preferred risks but maintain strict underwriting elsewhere. Expiring limits are generally available, and some insureds are using premium savings to increase limits. 

In Japan, some insureds are reducing limits or relying on coinsurance to maintain coverage.

Deductibles are stable, though Automobile deductibles in Singapore are rising due to higher claims costs, whilst Cyber deductibles are decreasing. Some Japanese insureds are increasing deductibles to manage premiums.  

Coverage terms are mostly stable, though competition is driving more flexibility outside Japan. PFAS exclusions are becoming more common.  

The Automobile market remains stable, though competition is increasing in Hong Kong. Insurers in other regions are raising rates to offset higher vehicle repair costs and loss trends for electric vehicles. However, China faces some capacity constraints.

Casualty and Liability conditions are favourable, with sufficient capacity in most markets except Japan. 

PFAS exclusions are being applied but are negotiable in some cases. Insurers remain cautious with large U.S. exposures.  

The Cyber market is softening in Asia, with price reductions in Singapore and Hong Kong. Insurers continue developing localised coverage and incident response services.  

Directors & Officers (D&O) insurance is seeing a soft market with price reductions and broader coverage in most Asian markets, though Japan’s conditions are more moderate.

Insurers are cautious about non-traditional risks, including crypto firms and companies with significant U.S. exposure.  

The Property market is improving for lower-hazard risks, with more favourable pricing and occasional reductions. 

However, placements with large Natural Catastrophe exposures, particularly in Thailand, are under pressure due to extreme weather events in 2024.