Soft conditions are prevailing across the Asia insurance market, allowing clients to benefit from lower premiums across all major lines and reinvest savings into broader wordings, additional limits, and new coverages, according to insurance and reinsurance broking firm Aon.
Clients on fixed-period tender cycles with large premium spends are seeing intense competition among insurers and very favourable renewal outcomes, although Japan remains the exception, as constrained capacity and rigorous underwriting continues to result in price increases.
Aon explained that Japanese insurers have been implementing more robust underwriting following guidance issued by the Financial Services Authority of Japan in 2024.
“Clients in Asia continue to benefit from very favourable outcomes at renewal, with premiums reducing by high single-digits across all major lines of business and with a flexible approach to underwriting prevailing. Japan remains an outlier as insurers re-focus on profit-based underwriting for commercial risks,” said Jon Pipe, Head of Commercial Risk Solutions Asia.
Capacity across the region remains ample to abundant, with local markets supplemented by international and regional insurance markets in London, Singapore, and the Middle East. As insurers seek new ways to deploy capacity, Aon is seeing more facilities and MGAs established in the region. Over-subscription is increasingly giving clients leverage to negotiate the most advantageous conditions and to focus on optimising the quality and reliability of participating insurers rather than simply completing placements.
Underwriting is prudent in many parts of the region, though growing competition is creating greater flexibility in Hong Kong and Korea. Long-term agreements continue to provide some stability for both insurers and clients.
Overall, limits are generally flat, although removal or enhancement of sub-limits can be negotiated in some cases. Some clients are using premium savings to increase policy limits, particularly for directors and officers, cyber, and casualty/liability lines. In Japan, limits remain under pressure for large property and casualty risks.
Aon stated that deductibles remain flat, with most placements renewing as expiring. In some markets, deductibles for natural catastrophe exposures may come under pressure, while property deductibles generally continue to increase in Japan. Adverse claims trends are also leading to increases in deductibles for cyber and automobile lines in select markets.
Coverages are broadly stable, although insurers are increasingly willing to remove restrictions imposed during the hard market cycle. Some Asian markets are also updating cyber insurance wordings to bring them in line with global standards.
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