Asia Pacific Reinsurance Rates Set to Fall Further in 2027

Global Insurance Desk: Reinsurance rates across the Asia Pacific region are set to fall further in 2027 as competition intensifies and capacity remains plentiful, according to a November 2026 report from AM Best. The rating agency expects continued price reductions for contracts that have not been hit by major claims, extending the softening already seen during the 2026 renewal season.

Price declines have already been recorded in several markets including Southeast Asia, India, Australia and New Zealand, where international reinsurers have been competing aggressively for business. Despite the downward pressure on rates, AM Best anticipates that primary insurers will largely keep their risk retention levels steady, although some may seek extra protection against frequent smaller claims and natural catastrophe exposures.

Natural disasters continue to pose a persistent challenge for both insurers and reinsurers in the region, especially in territories vulnerable to earthquakes, typhoons and flooding. Singapore based reinsurers recorded underwriting profits of 455 million Singapore dollars, or about 352 million US dollars, from their offshore insurance books in 2025. That figure was well down from roughly 1.1 billion Singapore dollars the previous year, reflecting higher claims including those from the March 2025 Myanmar earthquake, which produced estimated insured losses of between one and two billion US dollars.

Overall, Asia Pacific reinsurers managed a four percent rise in net insurance service revenue in 2025, reversing a 4.1 percent decline recorded the year before. Shareholders’ equity increased 14.1 percent, helped by retained earnings and investment returns. The combined ratio edged up to 92 percent from 91.4 percent, signalling a modest softening in underwriting margins even while remaining comfortably below the break even threshold.

AM Best noted that reinsurers are increasingly willing to offer lower prices and more favourable terms to insurers that demonstrate stronger claims records and robust risk management. At the same time, competition is expected to grow as additional international players seek a larger foothold in Asian markets. In Japan, the planned merger of Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance scheduled for April 2027 could further reduce demand for reinsurance capacity and add to the downward pressure on rates.

The agency expects reinsurers to stay selective when underwriting risks that carry significant natural catastrophe exposure. These observations are drawn from AM Best’s latest assessment of the Asia Pacific reinsurance market.