Kathmandu. Premium rates for reinsurance companies in the Asia Pacific region have started to fall due to increased competition as they move cautiously amid uncertainty. This is why it is important for reinsurance companies in the Asia Pacific region to maintain insurance discipline.
S&P Global Ratings’ latest report is titled ‘Asia Pacific Reinsurance Sector Update’. “Insurance margins in the Asia Pacific region are likely to come under pressure compared to global companies,” said S&P Credit analyst Tripti Kulkarni. ’
Despite this, continued efforts to improve risk selection and a supportive domestic book will help support stable insurance margins at large, Kulkarni added. According to the report, the sector is facing increasing challenges from inadequate reinsurance capacity and increasing availability of alternative capital. “This will lower premium rates,” the report said.
S&P said catastrophic losses and capital market volatility were the main risks. “Despite these pressures, reinsurance companies in the region are supported by strong domestic market conditions, diversified business portfolios and solid capitalization,” the report said.
