Asia’s fragmented cycles demand a holistic approach to risk, says Swiss Re

Addressing today’s complex risk landscape requires a holistic approach, Swiss Re’s Victor Kuk tells SIRC Today, as Asia’s fragmented market demands prudent management and stronger public–private collaboration.

Key points:
Strong demand for nat cat, specialty solutions
Public–private partnerships help narrow the gap
Data and dialogue key to resilience

Across Asia-Pacific, re/insurers are grappling with overlapping shocks that defy traditional cycle-based thinking. Geopolitical fragmentation, intensifying weather extremes and shifting trade patterns have created a risk environment of unusual complexity. Business lines once moving in sync are now diverging – some stabilising, others still recalibrating after years of inflation and heavy losses.

That fragmentation, says Victor Kuk, head of P&C reinsurance for Southeast Asia, India, Korea, Hong Kong and Taiwan at Swiss Re, is forcing reinsurers to rethink how they manage volatility and support clients. “What we’re seeing ahead of renewals is not one single cycle but a very diverse landscape, where different lines of business are at different stages of the underwriting cycle,” Kuk told SIRC Today. 

Some economies are still absorbing inflation-driven loss costs, while others are stabilising for renewed growth. Against this uneven backdrop, Swiss Re is sticking to its fundamentals – risk-adequate underwriting, early and transparent dialogue and long-term partnerships to help clients grow sustainably through shifting cycles.

A shifting mix of risks

Reinsurance demand remains strong, fuelled by geopolitical tension, economic volatility and natural catastrophe losses that have now topped $100 billion annually for five consecutive years. In 2024, global nat cat losses reached $318 billion, of which only 46% were insured. In Asia, the protection gap stood at roughly 84%.

The pressure, Kuk said, differs across sectors. Marine insurance has been hit by “reduced global trade flows” and port disruptions, engineering by “rising construction costs”, and credit and surety by “defaults and project cancellations”. 

Meanwhile, cyber has become one of the region’s more strategically important lines. “Geopolitical fragmentation is increasing systemic cyber exposure,” he noted. “That makes cyber insurance quite important.” Demand for business-interruption and trade-disruption protection is also rising as companies seek greater resilience.

Regional contrasts, local responses

Across Southeast Asia, India, Korea, Hong Kong and Taiwan, the market picture is mixed. “In Southeast Asia, recent events in Myanmar and Vietnam have underscored the growing frequency of secondary perils,” Kuk said. “We’re helping clients assess how these evolving risks can be better managed and incorporated into their protection strategies.”

In Hong Kong, Taiwan and Korea, abundant capacity from “established peers and MGAs” keeps competition fierce. “However, new accounting regimes are encouraging cedants to retain more risk themselves — a healthy development overall,” he added.

“We need reliable data and increased risk transparency across the insurance value chain.”

Swiss Re also sees opportunities in proportional programmes across property, casualty and specialty lines and in emerging risk pools such as pet insurance and scheme business. “Our strength lies in providing tailor-made reinsurance solutions aligned with each market’s maturity,” said Kuk. 

The nat cat challenge

With roughly a third of global catastrophe events occurring in Asia, Kuk believes the region can no longer treat reinsurance purely as a shock absorber. “Addressing today’s complex risk landscape requires a holistic approach… we need reliable data and increased risk transparency across the insurance value chain,” he said.

He pointed to Swiss Re’s work with a mutual of councils in Australia to model extreme weather risk. “Using our global datasets and geospatial tools, we created a digital twin of key assets to visualise exposure and guide targeted resilience measures.” Such initiatives, he said, show how adaptation and mitigation rely on shared data, investment and accountability between the public and private sectors.

That partnership model is also central to narrowing Asia’s vast protection gap. In Indonesia, the Asuransi Barang Milik Negara (ABMN) programme protects more than 83,000 state assets worth $12.7 billion against both natural and man-made perils.

In India, the Women’s Climate Shock and Insurance and Livelihoods Initiative (WCS) offers parametric cover for women in the informal labour sector exposed to extreme heat. “When temperatures triggered payouts last year, 90% of women enrolled received claims,” Kuk said. “It’s a good example of how insurance innovation can advance both resilience and financial inclusion.” 

“These projects prove that narrowing the protection gap requires more than capacity,” he added. “It takes coordination, reliable data and a long-term view.” 

Globally, the protection gap for natural catastrophes reached $385 billion in premium equivalent terms in 2023, with Asia-Pacific accounting for nearly $152 billion — a reflection of both rapid growth and inflationary pressures. 

Looking ahead, Kuk expects demand for catastrophe, specialty and structured solutions to continue, though he warns cross-border barriers and social unrest could complicate capacity flows. 

“Demand is likely to remain strong across Asia, given the region’s significant underprotection, but several risks need to be managed carefully,” he said.

“Strikes, riots and civil commotion risks are escalating globally,” he said. “They’re evolving from isolated shocks into frequency risks with severe tail potential, requiring prudent accumulation management.”

Despite these pressures, he remains optimistic. “Resilience is built over time – through collaboration, good data and risk-adequate underwriting,” he said. “That’s what will allow the industry to manage today’s volatility and still support growth tomorrow.”

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