Guy Carpenter Experts from Asia Pacific share their insights into reinsurance renewals on 1 January 2026, highlighting the region’s good performance this year with below-average catastrophe losses.
Asia Pacific CEO Tony Gallagher noted that over the past three years Guy Carpenter has seen growing interest in growing market share in the region, supported by a strong balance sheet.
The company expects Asia Pacific’s capacity index to exceed 130%, a surplus that has led to double-digit declines in much of the region.
While the program structure remains stable, terms and conditions have expanded. However, Thailand remains a notable exception due to recent earthquake and flood events.
“The recent earthquakes and floods in Thailand alerted the market to potential cat exposure risks in the region. Subsequently, rates for loss impact plans increased by double digits,” Gallagher said.
Adding: “Some insurers are taking advantage of these opportunities to purchase down insurance. Others are looking to drive growth and we expect M&A activity to increase as companies seek to increase scale and diversify their risk profiles.
“Finally, MGA continues to attract significant interest due to its expertise and ability to provide tailored underwriting solutions for each market.”
This year’s update cycle is later than previous years. Asia Pacific head of distribution Stella Geng attributed the delay to ample market capacity and recent localized weather events such as hail and flooding, which have lengthened negotiations.
Geng observed a clear difference in pricing: No-loss property plans saw double-digit increases on a risk-adjusted basis.
She also noted the growing demand for structured solutions that enable clients to manage risk over the longer term, providing greater certainty and financial stability.
“Reinsurers are taking a customer-centric approach,” Geng noted. “They offer greater flexibility in pricing and are more open to package deals with strategic partners across multiple lines of business. While these negotiations tend to be more complex and time-consuming, early conversations with reinsurers are critical.
“Starting discussions early, before the renewal deadline, greatly improves the chances of getting a favorable sign. We are already seeing new market interest in the Asia-Pacific region,” the executive said.
Ben Dunnett, managing director of Asia Pacific Professional Heads, said the retrocession market is well supplied, with market purchase limits of approximately US$37 billion.
Dunnett said: “Some markets within our industry can limit their coverage to ten times. So, overall, supply has never been an issue in the vintage market. It’s been a mix of supply areas and prices. This renewal vintage demand is up $150 million, or about 6%, compared to last year. However, supply is growing faster, with dedicated reinsurance capital growing 8% by 2025.”
This resulted in rapid market weakness, with risk-adjusted pricing holding steady at around -15%.
Dunner noted a shift in product preferences, with a 14% increase in demand for total cover as customers look to reinvest premium savings into income protection and a renewed interest in lower deductibles.
On the international stage, the trend towards oversubscription is particularly prevalent in catastrophe excess loss (Cat XL) placements.
Amber Tcheang, head of the Center for Real Estate Excellence, noted that while some cedants opted for “pricing discovery” rather than formal offers, the offers received ranged from flat to down 15 per cent.
Tcheang noted that demand for Cat XL has increased as some insurance companies seek additional limits at the higher end of their plans or purchase new coverage reduction products in 2026.
“While we did see some restructuring, retention levels have remained fairly stable and the Risk XL structure has remained largely unchanged. We’ve seen risk-adjusted price declines for Cat XL in the double digits, and if we’re seeing risk XL firm order terms declines in the flat to double digit range,” the executive said.
She continued: “Pro-rata commission provisions will generally improve, but this will largely depend on the performance of individual treaties. When it comes to coverage changes, there are really no significant market movements to check for these changes, and they will largely depend on ceding requirements.”
The conclusion was: “However, we have seen some examples of terms extensions, as well as changes in some cedants from paid to prepaid recovery, and so far we have seen significant oversubscription of the CAT XL placement. For Risk XL, capacity is slightly less abundant, but there is still no problem completing these placements.
“Reinsurers have been willing to cover across the board to ensure login security, including Tier 1 and frequency coverage.”
