Central Asia insurers diversify portfolios with reinsurance play: AM Best

Despite the shift possibly driving profits, AM Best still warns of risks.

Central and West Asia’s reinsurance will likely face a shift, as domestic insurers move to fill the gap left by a decline in globally sourced reinsurance capacity, AM Best said.

The report, titled “Riskier Exposures for Central and West Asian Insurers as They Turn to Reinsurance to Drive Overseas Growth,” notes that the exit of Russian reinsurance capacity following economic sanctions in 2022 has created opportunities for local carriers.

In response to a highly competitive domestic environment that limits organic growth, insurers in the region are increasingly looking to expand into international reinsurance markets. 

This strategy is aimed at diversifying their portfolios and building a presence overseas.

Whilst this shift could enhance the insurers’ market profiles if they achieve profitable international growth, AM Best warns of significant risks.

According to Todor Kitin, senior financial analyst at AM Best, these risks are particularly high for insurers lacking the expertise or knowledge required to operate effectively in new and unfamiliar markets.