Macroeconomic and geopolitical uncertainties cast shadows on APAC insurer confidence

Norton Rose Fulbright’s Anna Tipping emphasises adaptability and risk mitigation as keys to resilience of APAC insurers.

As capital challenges stemming from macroeconomic and geopolitical uncertainties continue, S&P Global Ratings issued a cautionary note, prompting a closer examination of the adaptability and resilience of insurers in the Asia Pacific (APAC) region.

Anna Tipping, partner and head of insurance for APAC at Norton Rose Fulbright, acknowledged these uncertainties in 2023 and defined what capital challenges might undermine insurers’ early confidence in a recent interview with Insurance Asia.

“The capital challenges that I think you’re talking about will predominantly impact the insurers that are headquartered in Asia Pacific because those insurers need to source their capital from Asia Pacific or further afield,” Tipping said.

She categorised APAC insurers into two distinct groups: those with headquarters within the region and those that are part of multinational conglomerates with headquarters elsewhere.

The capital challenges faced by these insurers are distinct, as headquarters location determines the source of their capital. Insurers headquartered in APAC rely heavily on debt capital markets within the region, while multinational entities turn to European or US markets for their capital-raising endeavors.

“Insurers have traditionally leaned on debt capital markets,” she added. “both Public Debt Capital Markets and private debt capital markets are being explored.”

However, Tipping observed a noteworthy trend: since there is an increased reliance on large reinsurance protection among APAC insurers as a strategy to address capital challenges, insurers are pulling in reinsurance support from typically European and US reinsurers to strengthen their balance sheets.

“I’m seeing an increased reliance on large reinsurance protection.. pulling through to the balance sheets of the large, typically European, but also US reinsurers,” she said.

When asked about strategies employed by insurers to ensure business resilience and sustained growth, Tipping emphasised the delicate balance between operational and claims costs.

Operational cost containment remains a priority for insurers, but claims costs — the essence of their business — require a more nuanced approach, she said.

“Insurance companies must continue to fulfill their obligations to pay claims while also scrutinising them more closely to prevent inappropriate claims from causing challenges,” she said.

Tipping noted that insurers in the developed Asia Pacific markets are already taking measures to safeguard their operations and investments against geopolitical risks. They are conducting thorough assessments of portfolio exposures and considering aggregation risk from countries and regions exposed to geopolitical risks, she said.

Geopolitical risks can encompass a range of issues, including trade tensions, international conflicts, regulatory changes, and political instability. These risks serve as a reminder that the insurance industry is not immune to external factors beyond their control and prompts the rolling out of strategy adjustments and risk management practices.

“The insurers that I work with are taking a deep dive into looking at what their portfolio exposures are,” said Tipping, adding that they are evaluating their reinsurance protection to ensure they have appropriate coverage for geopolitical risks.

In conclusion, APAC insurers stand at a critical juncture in 2023, facing the twin challenges of macroeconomic fluctuations and geopolitical tensions. With the guidance of industry leaders like Tipping, these insurers are able to demonstrate adaptability and resilience as they recalibrate their strategies to ensure stability, growth, and continued service excellence in a rapidly changing environment.

For more comprehensive insights into the insurance landscape and the latest developments, visit Insurance Asia at

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