Pricing for non-cat property stable
Pricing for non-cat exposed property in Asia has remained more or less stable, but other classes have come under stress with pressure on rates to increase, Alamgir Kabir, executive vice president at the Bangkok-based Asian Reinsurance Corporation (Asian Re), told SIRC Today.
Reinsurance capacity for cat-exposed property is also readily available with a stable price, he said.
However, certain lines of business face challenges, such as marine, which is still recovering from the Tianjin explosion in 2015. “Countries are still producing some losses and there is a lot of competition,” he said.
Kabir noted that state-backed crop insurance in India has enjoyed a breakthrough in primary premium growth but, due to government backing, reinsurance premiums have not followed suit.
“Some 90 percent of premiums are subsidised by the government. Due to that, this is booming very fast. Growth rate in premiums is likely to be 33 to 37 percent,” he said.
Demand for financial insurance across Asia-Pacific is also growing at a very fast rate driven by welfare activities and banks. Reinsurance capacity is available for this despite high loss ratios as lots of new players enter the region, he added.
Kabir expects that the more stringent regulations emerging in some countries that limit the placement of reinsurance in the overseas markets will be a challenge for international reinsurers active in the region.
“Many reinsurers, having sufficient capacity, are not allowed to write their reinsurance business, despite prerequisites are met,” he said. “But some reinsurers have been accepting reinsurance businesses opening offices in the respective countries.”
Kabir cites Indonesia as being one example of where this has happened. New regulations stipulate that reinsurance must be placed in the domestic market.
Asian Re is an intergovernmental organisation established in May 1979 under the auspices of the United Nations Economic and Social Commission for Asia and the Pacific (UN-ESCAP). Membership is open to all state members or associate members of UN-ESCAP. It commenced operations in 1980.
Since July 2005 associate membership is open to non-ESCAP member countries of the UN, private organisations, private corporations, non-government organisations and multilateral institutions.
Following the objectives of the establishment of Asian Re, the reinsurer’s vision is to become a leading professional reinsurer capable of meeting the reinsurance needs of the Asia-Pacific region.
“As per our underwriting guidelines we will continue writing business from this region with close monitoring of cat exposure and event limits,” Kabir added.
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