APAC’s overall insurance stability continues to rest heavily on its most advanced markets, according to credit rating agency AM Best, with Japan, Singapore, Hong Kong, and South Korea providing the strongest foundation for regional credit quality and capital strength.
Developing markets remain profitable and continue to expand, but their performance is more variable and influenced by structural constraints.AM Best’s 2024 review covers all rated re/insurers across the region and outlines rating movements throughout the year.
The assessment spans a broad range of insurance entities in both advanced and developing jurisdictions, including reinsurers, primary insurers, mutuals, captives, credit and health insurers, and protection and indemnity (P&I) clubs. Australia, Hong Kong, Japan, Macau, New Zealand, Singapore, South Korea, and Taiwan are identified by AM Best as the region’s most established markets.
According to AM Best, the insurance sector has remained comparatively steady this year, supported by the absence of large-scale natural disasters affecting insured assets. In places where environmental hazards still pose the greatest threat to underwriting outcomes, strong reinsurance protection and disciplined underwriting remain crucial.
Financial strength across APAC is supported by solid capital positions, improved earnings following the strain of pandemic-related medical claims, particularly in Thailand and Taiwan, and consistent risk management practices. The widespread uptake of new energy vehicles, especially in China, is generating opportunities for insurers, though it is also associated with increased claim frequency and higher repair costs.
AM Best notes that the credit quality and capital base of the region continues to depend largely on its advanced markets, while developing markets are still advancing and generating profits, but with greater fluctuation.
The agency finds that stronger ratings continue to be concentrated in advanced APAC markets, supported by mature regulatory structures and governance frameworks.
Compared with developing regions such as MENA, Latin America, and the Caribbean, APAC’s ratings tend to fall between a+ and a-, giving the region a comparatively strong overall profile. Rating steadiness remains a feature of the region: fourteen entities were upgraded in 2024 and none were downgraded, with half of the upgrades reflecting alignment with parent organisations.
Capital resilience remains a defining characteristic of APAC insurers, with roughly 60% of rated companies falling within AM Best’s top two categories—“Strongest” or “Very Strong”—signalling robust capitalisation and asset management. Advanced markets continue to show stronger balance sheet metrics based on AM Best’s Best’s Capital Adequacy Ratio (BCAR).
Operating performance across APAC has generally been positive. Most insurers hold Adequate assessments, aided by higher investment income in a high-interest-rate environment and steady underwriting practices. Firms with stronger operating performance assessments tend to achieve more consistent combined ratios and experience less fluctuation in their results.
Business profile assessments across the region remain largely Neutral, although advanced markets have a higher concentration of Favourable assessments due to stronger data capabilities, broader distribution, and more diversified operations. Developing markets continue to progress but still face limitations in scale and regulatory consistency. In a global comparison, AM Best places APAC in the middle tier, ahead of MENA and the Caribbean, though not as strong as Europe or North America.
Enterprise risk management practices across APAC are largely sound, with more than 90% of insurers receiving Appropriate assessments. Only a small number of insurers in advanced markets achieve “Very Strong,” and none in developing markets reach that level. In global terms, AM Best positions APAC in the lower middle tier, ahead of MENA but behind regions where risk management is more firmly embedded in corporate planning.
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