It won’t be long before the east coast of China is as big a concern to the (re)insurance market as the Gulf of Mexico is currently.
Losses in the Asia-Pacific (APAC) region have grown substantially in the last 5–10 years – market events including the 2015 Tianjin explosions, the Thailand floods and the Christchurch earthquake in 2011.
In many cases, the scale of losses is still being quantified: in fact, this is true for the 2011 Christchurch earthquake, let alone for Tianjin.
The scale of (re)insurance losses continues to trend upwards and this will only increase as APAC economies develop.
As the reinsurance sector in the region grows, regulator-driven change in respects to risk-based capital rules in-country will become even more significant.
The APAC region comprises 10–15 different regulatory entities, each with different views on how risk-based capital works, and how reinsurance supports that.
Regulatory variations, ambiguities and – in some cases – outright anomalies won’t disappear any time soon. There won’t be a common standard (like Europe’s Solvency II), but there will be more emphasis on business and premiums staying in the country rather than flowing back to the wholesale markets.
China, Indonesia, Korea and Malaysia are all heading down this path and others will follow. Domestic carriers are required to place reinsurance in-country as a priority, which will also increase emphasis on reinsurance brokers in-country.
At JLT Re we are enthusiastically embracing these evolving markets. In the last 4–5 years we have invested far more in the region than any other reinsurance broker.
Aside from already having offices in Singapore, Sydney, Hong Kong, Shanghai, Beijing, Thailand and Taiwan, we are setting up an office in Malaysia, and are in the process of gaining a licence to open an office in Indonesia.
This means insurers in-country will benefit from greater on-the-ground expertise and analytics capability across APAC – at a time when they need it more than ever.
Download this Risk Perspective article.
For more information, please contact Stuart Beatty, Asia Pacific CEO on +61 (0)478 304 812 or email firstname.lastname@example.org