Kathmandu. Premium growth in the Asia-Pacific insurance market is expected to slow in 2025 amid increased competition and economic challenges.
Gallagher Rico’s latest Asia Pacific Market Watch report highlights that underwriting quality and portfolio flexibility are the key variables driving slowing insurance premium growth in the Asia Pacific region. “Non-life insurance premiums in the region continued to rise in 2024,” the report said, “although it will slow in many markets in 2025.” ’
Vietnam and the Philippines led the way with GDP growth of 7.1% and 5.7%, respectively. While in Vietnam (15.8%), India (12.8%) and Malaysia (7.7%), the increase in non-life insurance premiums outpaced the overall economic expansion.
Mature markets such as Singapore (3%), South Korea (2.2%) and Thailand (0.8%) have experienced weaker growth.
“Economic uncertainty, slowing global trade and falling interest rates are weighing on investment returns,” Gallagher said in a statement. Insurance companies have been asked to strike a balance between growth and capital discipline to maintain flexibility.
Natural disasters remain a major challenge for the Asia-Pacific region. Major events are expected to occur in 2025, including the Myanmar-Thailand earthquake and Cyclone Alfred in Australia.
The report notes growing interest in parametric insurance and disaster bonds, as well as major regulatory efforts to promote climate resilience. Regulatory modernization is also shaping the sector. Most Asia Pacific markets have adopted or are implementing IFRS 17 and have advanced risk-based capital arrangements.
Liberalization measures are opening up new opportunities. However, increased data security and AI governance regulations are expected to increase the demand for cyber insurance. Digitization is gaining momentum. Regulators such as Malaysia have implemented digital insurer licensing regimes.
Key growth areas include health insurance in India, Hong Kong and Vietnam, renewable and electric vehicle coverage in China, Singapore and Taiwan, and cyber insurance in Australia, Singapore and South Korea.
After many years of hard work, reinsurance capacity is improving. As a result, lower rates and more favorable treaty terms are expected in 2025. However, reinsurance companies remain in the loop and continue to reward strong underwriting and quality performance.
As 2026 approaches, Gallagher Relay said: “Insurance companies that maintain portfolio quality, risk discipline and operational flexibility will perform better in a more complex and competitive landscape.” ’
