Standard & Poor’s Ratings Services’ new report – “Asia-Pacific Reinsurance Markets Remain Stable Despite Softening” – indicates that ratings on global and domestic reinsurers in the Asia-Pacific markets are expected to remain stable, “reflecting regional market growth, satisfactory underwriting results, and the improved capitalization of some regional players.”
S&P credit analyst Connie Wong commented: “There is divergence in reinsurance pricing across the region, with the more mature markets such as Australia and Japan seeing harder pricing and the emerging markets such as China and Taiwan experiencing softer pricing driven by the recent profitability of cedants.”
The shape of risk ceded in the reinsurance market has also changed in recent years. “In line with global trends, some insurance companies in Asia-Pacific have tried to raise their retention limits to use excess-of-loss protection in order to capture more profits,” Wong continued. “We view this as a supportive factor in contributing to bottom-line profitability.”
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