KUALA LUMPUR, Aug 29 (Bernama) -- Major Asia-Pacific reinsurers have sustained the ability to deliver stable operating and return on equity ratios in 2021 with average annual net premium growth of nearly 10 per cent in the most recent five-year period, according to a new AM Best report.
In a statement today, the global credit rating agency said the Best’s Market Segment Report, titled “Asia-Pacific’s Major Reinsurers Deliver Stable Performances Amid Growing Competition and Uncertainty”, is part of AM Best’s month-long look at the global reinsurance industry ahead of Rendez-Vous de Septembre in Monte Carlo.
It said based on the operating performance of a group of selected Asia-Pacific domiciled reinsurers that ranked among the top 50 largest reinsurance groups globally as calculated by AM Best, 2022 is shaping up to be another profitable year thanks to benign natural catastrophe activity in the region in the first half of the year.
AM Best said pricing momentum in most Asia-Pacific markets is also expected to firmly support premium rate increases for the 2023 renewal seasons given the recent years of underperformance and retrocession capacity reduction in the global reinsurance market.
It said the Asia-Pacific composite’s five-year average return on equity from 2017 to 2021 is 5.8 per cent.
“While the loss ratio shows an increasing trend, it is offset by a decreasing expense ratio, resulting in a stable combined ratio that has hovered around the break-even point,” it said.
It said investment returns have also remained stable.
AM Best said the accumulation of natural catastrophe risks in Asia-Pacific reinsurers’ home markets remained a significant risk.
However, it said reinsurers in the region have put in years of effort to diversify growth and now are reaping the benefits from business profiles that are more balanced between domestic and overseas contributions as well as life and non-life business.
It added that the capacity in the insurance-linked securities (ILS) market could also support regional reinsurers in capturing rate hardening opportunities.
More details at www.ambest.com.
-- BERNAMA
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