Authors: Mark Morley Mark O’Brien
Premium growth has decelerated in the region amid intensifying competition and other challenges. In this environment, the quality of business has become a key differentiator for resilience. Nevertheless, there are good opportunities for growth, and the reinsurance market continues to be supportive as we head into the 2026 renewal – particularly for those who can demonstrate underwriting discipline and portfolio strength.
Gallagher Re's third annual APAC Market Watch report paints a picture of a diverse and vibrant insurance industry across the region. Insurers' reported financial performance for 2024 was robust across the 14 markets we track, with continued growth in non-life premiums, albeit moderating in many places. Some markets benefited from infrastructure spending and digitalization, while others faced constraints from tariff regimes, rising loss ratios, and price competition.
The region has continued its trend toward regulatory harmonization, with all but two markets now operating under a risk-based capital (RBC) regime, and IFRS 17 accounting standards now widely adopted. Ongoing market liberalization in many quarters, and the removal of barriers to foreign ownership, is unlocking new growth opportunities.
The report identifies five key themes shaping the near-term trajectory of APAC's non-life insurance industry — from macroeconomics to regulation to climate risk. We set out how insurers are rising to meet these challenges, and how Gallagher Re can support.
1. Navigating a complex macroeconomic environment
GDP growth slowed across APAC in 2024, with mature economies growing by 1.4% on average, and emerging markets by 5.1%. Southeast Asia outperformed, with Vietnam (7.1%) and the Philippines (5.7%) both expanding strongly.
Growth in non-life insurance premiums continued to outpace GDP in many places, particularly emerging markets like Vietnam (15.8% non-life premium growth), India (12.8%) and Malaysia (7.7%). Premium growth was slower in markets such as Singapore (3.0%), South Korea (2.2%) and Thailand (0.8%). Non-life insurance penetration remained higher in mature markets than in emerging ones.
Economic headwinds and shifting global trade policies have had limited direct impact on insurance markets so far, but trade-dependent economies like China and South Korea may face medium-term GDP headwinds, and this may hurt the sector's prospects going forward. Meanwhile, falling inflation (leading to lower interest rates) poses a challenge for investment returns. Insurers must balance growth ambitions with disciplined capital deployment to navigate this economic uncertainty.
2. Confronting climate risk and catastrophes
Natural catastrophes continue to be highly significant for insurers in the region, with notable events in 2025 including March's earthquake in Myanmar and Thailand, and Tropical Cyclone Alfred in Australia. Climate variability, coupled with urban expansion into high-risk zones, is intensifying exposure at risk. There is renewed interest in parametric insurance, catastrophe bonds, and risk-based underwriting to mitigate risk and support growth. For example, the SEADRIF Insurance Company has provided an innovative approach to financing public disaster response for the government of Laos. Regulators in the region are playing a wider role by creating policies, frameworks, disclosures, and guidelines to drive climate action and resilience.
3. Embracing regulatory modernization and market liberalization
Most APAC markets have either implemented, or are preparing for, IFRS 17 and enhanced RBC regimes. These reforms are reshaping solvency strategies and prompting insurers to optimise capital and reinsurance programs. At the same time, market liberalization measures such as Vietnam's removal of foreign ownership restrictions, or low-touch regulation zones like India's GIFT City initiative, are fostering cross-border partnerships and growth opportunities. Insurers in the region are also eyeing the strengthening of data protection laws and AI governance initiatives, as possible growth drivers for cyber insurance.
4. Capturing growth in digitalization and new markets
Online distribution, embedded insurance, and AI-powered underwriting are reshaping the industry in APAC. Regulators are encouraging innovation, such as through Malaysia's digital insurer licensing regime. Growth segments for the non-life industry include health insurance (India, Hong Kong, Vietnam), electric vehicles and renewables (China, Singapore, Taiwan), and cyber insurance (Australia, Singapore and South Korea). At the same time, rising medical inflation is pressuring health insurers in several markets, while electric vehicle insurance requires disciplined underwriting due to unique risks like battery problems.
5. A turning point in the reinsurance market
After several years of hardening, reinsurance capacity is returning, which has already led to rate reductions and better treaty terms in 2025. Reinsurers' capital strength is enabling collaboration on product innovation, market expansion, and addressing protection gaps. However, reinsurers remain selective, rewarding disciplined underwriting and quality data. It is a good time for insurers to take advantage of these favorable conditions, strengthen their portfolios and prepare for future challenges.
The road ahead: The defining differentiator is quality
Heading into 2026, the Asia-Pacific economies are adjusting to a new reality – one where governments and policymakers can no longer count upon booming global trade and rapid development to lift all boats. The business and risk landscape for insurers is becoming more complex, competitive and demanding. In this environment, quality will be the defining differentiator. Insurers with resilient portfolios, disciplined execution, and strong risk management will be the ones who are best placed to thrive.
As one of the largest regional and global reinsurance brokers, we are uniquely positioned to help clients turn these challenges into opportunities. Whether it's optimizing capital, structuring innovative reinsurance protection, delivering customized deals, or enabling growth in new lines and markets to diversify, our role is to deliver best-in-class services and solutions that combine global expertise with local insight.
