Reinsurers see April renewals stabilise

Increased capacity alongside demand was seen in APAC, says Aon.

The region’s reinsurance landscape reflects a mix of stability, competition, and growth opportunities, with reinsurers and insurers adapting to evolving market dynamics and demands, according to Aon.

1 April is a critical renewal date for Asia Pacific, notably Japan, South Korea, and India, with a significant portion of treaty business renewed. 

The region saw an increase in capacity alongside stable demand, leading to heightened competition for property catastrophe business, Aon’s Reinsurance Market Dynamics April 2024 report noted.

Despite excess capacity, reinsurers remain disciplined and price-sensitive, particularly in challenged segments like per-risk reinsurance and industrial fire business.

Increased supply presents opportunities for insurers to achieve more favourable outcomes at future renewals, especially in fast-growing economies like China and India.

Japan's catastrophe reinsurance market experienced ample capacity at the April renewal, resulting in stable pricing or slight reductions for property catastrophe business.

Reinsurers, more confident now, are competing to grow or protect their positions, offering opportunities for insurers to benefit across their portfolios.

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Improved returns and competition are expected to lead to a market equilibrium, barring major catastrophe events.

Korea's reinsurance market remained stable on April 1, with adequate capacity for property catastrophe risks, contrasting with the challenging renewals of 2023.

While there were no significant changes to catastrophe pricing or conditions, insurers could negotiate limited improvements due to reinsurers' increased attention to their needs.

April 1 saw continued favourable trends from January renewals in China's reinsurance market, with easing market conditions from 2023.

Dominated by onshore reinsurers, China's market is less influenced by global cycles, with resilience demonstrated by non-life insurers despite economic slowdowns.

India's insurance sector, predicted to be the fastest-growing among G20 countries, offers new opportunities for reinsurers.

Closing protection gaps and supporting the growth of new lines will require significant additional capacity and innovation in the rapidly developing market.