A tougher economic backdrop combined with a tightening of reinsurance capacity is prompting Asia Pacific insurers to look at optimising their balance sheets and consider new operating models. Jim Atwood and Roshan Perera explore the rising popularity of retrospective solutions in the region.
Reinsurance renewals during 2023 revealed a strong emphasis on price and contract conditions across all areas and lines of business, with reinsurers taking a more disciplined and cautious approach in deploying their capital. While the supply of capacity appeared adequate at renewals, there is a sense that supply dynamics will continue to be challenged into 2024, with a tightening of capacity relative to demand.
That tightening of supply could be particularly acute for operators in Asia Pacific (APAC). One contributor to the supply/demand dynamic is inflation. While inflationary pressure across APAC has been a less prominent topic compared to Europe or the US, the region was not entirely immune. Inflationary effects were seen in several countries and APAC is also experiencing the weakening of local currencies, while disruptions to supply chains arising from the Covid-19 pandemic have still not fully eased.
