Asia Pacific reinsurance buyers are broadly benefiting from market softening, with greater competition and more choice, according to Tom Curtis, Partner, Specialty & Reinsurance Consultancy, and Gary Moran, Senior Partner, Aviation & Transportation, at OneGlobal. However, APAC remains a patchwork of markets, with outcomes continuing to depend on territory, class, natural catastrophe exposure, loss experience and portfolio quality.
Reinsurers are also becoming increasingly selective, while the degree of softening varies between classes, Curtis and Moran said.
The executives highlighted the distinction between the pricing cycle and the underlying risk environment, noting that readily available capacity does not remove the need to assess catastrophe exposure, supply-chain dependencies and geopolitical uncertainty.
“Capacity may be readily available today, but catastrophe exposure, supply-chain dependencies and geopolitical uncertainty still require careful assessment,” they said.
For buyers, current conditions provide an opportunity to reassess their reinsurance arrangements and the protection they deliver.
“For clients, this is a valuable opportunity to revisit what their reinsurance programme needs to achieve and whether that intention delivers the required outcomes. Price matters, but so does the quality of protection, the reliability of counterparties and how the programme responds when several exposures are impacted by the same event,” Curtis and Moran said.
“Plentiful capacity makes structure and security more important, not less, and ensuring that this is done correctly from the outset is essential.”
OneGlobal sees facultative reinsurance as a particularly useful tool for APAC clients seeking to take advantage of softer market conditions.
As a specialty and facultative reinsurance broker, the firm views facultative placements as a “focused, strategic and tactical tool”, which can help local insurers use capital more efficiently, manage concentrations and accumulations, and write complex risks that sit alongside their treaty programmes.
“Used well, it helps local insurers to use capital more efficiently, manage concentrations and accumulations, and write complex risks that sit comfortably alongside their treaty programmes,” Curtis said.
“In a softer market, that can mean buying additional limit, improving reinstatement terms, broadening coverage or finding more affordable protection against frequency losses.”
However, Curtis stressed that maintaining the quality of reinsurer security remained critical, with the broker’s Asian and global relationships helping it secure appropriate capacity.
“What is critical in soft market conditions is the management of security. Quality and responsive security is essential to our clients, and our particularly close Asian and global reinsurer relationships, whether directly or through selected MGAs, allow us the ability to secure appropriate capacity for every risk, without compromising on the quality of reinsurer security,” he said.
Curtis added that understanding a client’s business plan and tolerance for risk and volatility was the starting point for developing an appropriate programme.
“We then test available structures across international markets. The best outcome is a programme that supports underwriting ambitions today, and which will remain robust when market conditions inevitably change.”
On inward opportunities, OneGlobal identified a broad range of specialty classes where economic activity is creating exposures that existing insurance arrangements do not fully address.
These include technical property risks, such as metals processing, agribusiness and mining; dedicated data centre insurance; sabotage and terrorism/political violence (S&T/PV); marine hull and machinery; marine cargo and logistics; upstream, midstream and downstream energy risks; conventional power; renewable energy; aviation and aerospace; construction and engineering, including construction-related bonds; third-party liability; financial lines; transactional risks associated with M&A activity; cyber and digital assets.
The executives said technical skill sets in these classes had been, and continued to be, transferred to local insurers, although the availability of domestic capacity varies.
“Some of these classes enjoy significant local capacity, but others, such as S&T/PV, Aviation, Renewable Energy, Data Centres and Transactional Risks, rely heavily on international reinsurance support.”
Changing and increasingly complex supply chains are also creating demand for cover that follows goods, storage arrangements and critical dependencies across borders, while opening up opportunities for specialist trade disruption solutions.
“Amongst the greatest challenges are the changing and ever-more complex supply chains creating demand for cover that follows goods, storage arrangements and critical dependencies across borders,” Curtis and Moran said.
“This also creates opportunities for specialist trade disruption solutions, where the financial loss may arise without physical damage to the cargo.”
Aviation is one sector particularly exposed to these challenges, with supply-chain disruption inflating claims even as fleets continue to grow. Lessors and regional carriers also require specialist attention, while risks spanning hull and liability through to war remain international by nature and heavily reliant on global reinsurance support.
Moran, whose specialism is aviation and transportation, highlighted the importance of international capacity in supporting the sector.
S&T/PV presents similar opportunities, with demand rising and much of the capacity and expertise based in regional hubs such as Singapore, alongside further capacity in major global markets.
Digital assets are another emerging area where specialist underwriting knowledge can help address protection gaps, particularly around custody, crime and liability exposures.
For underwriters, OneGlobal said success depends on understanding risks, setting clear coverage boundaries and managing accumulations.
“Premium growth alone is a poor measure of success in a softening market,” Curtis and Moran said.
OneGlobal’s priority in APAC is to become the first call for specialty reinsurance, building on existing relationships and developing new ones as it expands its presence in the region.
The firm has invested in teams in Singapore and Hong Kong, but stressed that it is not seeking to establish a presence in every APAC market or compete with local brokers for their retail business.
“We’re relatively new to the region, and we’re not pretending otherwise, but nor are we starting from scratch,” Curtis and Moran said.
“Our global team includes people who know Asia well and have worked in the region, so we understand the markets and the clients. The job now is to build on existing relationships, create new ones and earn the trust to enable us to demonstrate that we can solve difficult placement challenges. Solving our clients’ difficult problems is what we are all about. It’s the DNA of the firm.”
Instead, OneGlobal works alongside local brokers and insurer clients to provide access to reinsurers across Asia, Lloyd’s and the London market, Europe, MENA, Bermuda, the US and Latin America.
The broker also highlighted its global operating structure as a point of difference, with the business operating as a single global profit centre.
“We’re a single global profit centre, so there are no internal conflicts over allocation of credit or revenue. The whole focus is always on client solutions,” the executives said.
OneGlobal is also building its capabilities in response to changing client exposures, with its new Digital Assets Division in Hong Kong cited as an example of investing in an emerging area.
The executives said the Singapore International Reinsurance Conference’s (SIRC) “Capacity to Capability” theme was particularly relevant to the broker’s approach.
“Our focus is on the expertise, programme structuring and service that make capacity useful to clients.”
Looking ahead, Curtis and Moran said APAC markets would remain vulnerable to disruption originating well beyond the region, with problems at maritime chokepoints, interruptions to energy supplies and cyber incidents at critical suppliers all capable of affecting industrial production, delivery schedules and cash flow.
Cyber risk provides a clear example of how an incident affecting a single supplier can have consequences across multiple markets.
“An attack on a single supplier, such as the check-in software behind several major airports, can ground flights and strand passengers across multiple countries without any physical damage at all,” they said.
“The same applies to ports, power plants and other critical infrastructure. For the region’s airports, airlines and logistics hubs, one weak link in the chain can become a wider, regional problem.”
This raises questions about where physical damage coverage ends and financial losses begin, particularly in relation to cyber and war exclusions in property and aviation policies.
Insurers need to test how their portfolios respond to connected losses, while buyers need to understand potential coverage gaps before an event occurs.
“What do the cyber and war exclusions in Property and Aviation policies actually leave uninsured?” Curtis and Moran asked.
They also highlighted the importance of examining political risk and supply-chain diversification, noting that suppliers in different countries may still depend on the same processor, port or transport corridor.
“That can create concentrations across several insurance lines that are easy to underestimate,” they said, adding that they expect these issues to increase demand for specialist advice and clearer coverage.
Ultimately, OneGlobal said it wants to be involved in clients’ reinsurance decisions at an early stage, while recognising the need to react quickly when placement challenges arise.
The firm reiterated that, with its local presence limited to Singapore and Hong Kong, it is not competing with clients for their own local business. Instead, it aims to provide technical support for specialty risks, develop innovative reinsurance placement structures for cedant clients and secure appropriate security across global markets.
“We’re problem solvers. We’d like to be involved at an early stage, but we understand the realities and our teams will always be quick to react in finding the best available solutions,” Curtis and Moran said.
