Reinsurers are expected to maintain underwriting discipline and become more selective.
APAC’s reinsurance sector faces heightened pricing risk whilst underwriting margins are under pressure in 2026, said Fitch Ratings.
The credit rating company expects ample capacity and strong competition to keep rates under pressure and support selective easing of terms and conditions, particularly for portfolios with relatively stable recent claims activity.
Reinsurers are expected to maintain underwriting discipline and become more selective, Fitch said.
“Pricing and terms are increasingly shaped by geography, business mix and cedant loss experience as market conditions become more segmented across lines and markets” it said.
Alternative capital is likely to become increasingly relevant in APAC insurance, Fitch said, although adoption will likely remain concentrated in select markets and business lines.
Secondary perils such as floods and wildfires are a key source of earnings volatility, Fitch said.
In addition, Fitch said that the new capital frameworks across several APAC markets are likely to encourage more disciplined capital management and greater use of reinsurance to improve capital efficiency and support solvency positions.