Asia Pacific reinsurers re-evaluate approach, says Fitch
High cat activity in the Asia Pacific region has prompted reinsurers to re-evaluate their underwriting approach and risk appetite, according to a report by rating agency Fitch.
Fitch says that reinsurers in the region have now become more risk-focused and better prepared for another big event in the region, following the battering they took during 2010-11.
The agency has also observed reinsurers tightening their underwriting practices, as well as reducing their participation in proportional reinsurance business, while increasing their non-proportional business.
Under the latter, reinsurers would only be affected if direct cedants or insurance companies' insured losses exceed a certain predetermined level, as opposed to taking a proportional share of the losses incurred by the cedants.
On a more optimistic note, Fitch believes that the catastrophes have also brought about higher business opportunities for reinsurers and capital markets in the region.
Reinsurers, especially those who were relatively unscathed from the recent calamities, have capitalised on the increasing rates to underwrite more and higher quality business from the Asian markets.