Full Capacity: 2026 is starting to heat up

January 17 2026 by

Welcome to Full Capacity, a weekly briefing on all the most important developments of the past week with a personal take on the news from our editor-in-chief, Mithun Varkey, delivered to your inbox every Saturday.   

IAN Exclusive. Gallagher Re has hired Aon’s Grant Hollyman as the CEO for Australia and New Zealand. Hollman, who has been the APAC casualty leader for Aon reinsurance solutions, will start in April and takes over from Heather Bone, who joined Allianz Australia last year.  

M&A update. Lockton has increased its stake to become the majority shareholder in Lockton Sime Insurance Brokers, its joint venture with Malaysian conglomerate Sime. 

Nat cat allowance. Aussie carrier Suncorp has blown through its H1 FY26 nat cat allowance following the severe hailstorm events towards the end of last year. It expects a nat cat bill of US$886 million, in excess of its budget of US$580 million.  

At the July 1 renewal, Suncorp had trimmed its reinsurance tower and did not renew a dropdown cover, which limited second-event retention to AU$250 million. 

Tighter control. The South Korean regulator has raised the core capital ratio requirement for insurers to 50% or above starting from 2027, in a move aimed at improving their capital quality to absorb potential shocks, such as financial stress. 

Geopolitical spillovers. Insurers are taking a guarded view of the impact of the capture of Venezuelan leader Nicolas Maduro and the rapidly evolving geopolitical risk environment.  

While there is little real exposure to Venezuelan risks, it is not the case in other regions of the world, with South China Sea now a particular focus. 

The US actions have redefined the approach of many major economies to the regions in which they dominate and how they will respond to what they view as international interference. 

Yet another fiery January  

After the January 1 renewals, it’s clear that the reinsurance sector is gearing up for a transformative chapter with the markets experiencing the sharpest correction in over a decade.  

We have witnessed capital levels soar to record heights, coupled with a commendable 16% return on equity. 

Certainly, a rather benign cat loss environment and the high retentions have spared the reinsurance industry unlike in the past years. 

However, one thing that stands out as far as the loss environment is concerned is the steady increase in secondary perils, as is the unusual nature of the perils. 

The biggest event last year, both for total losses and insured losses, was undoubtedly the Los Angeles wildfires.  

And as we settle into the new year, we are staring at an ominous bushfire in Australia’s Victoria state.  

The Insurance Council of Australia on Friday escalated its significant event declaration to an “insurance catastrophe”, with 2,369 claims being lodged across property, commercial, and motor. 

In Victoria, over 400,000 hectares of bushland and farmland have burned – more than five times the size of Singapore. 

Hundreds of structures have also been destroyed since extreme heat and high winds fuelled catastrophic fire conditions.  

Temperatures reached above 40 degrees Celsius, strong winds up to 100km/h, fuelled by a heatwave entering its second month. 

The inevitable comparisons to the 2019-20 Black Summer are starting to circulate – an event so vast it touched 80% of the population and cost around US$1.5 billion in insured losses.  

As Moody’s puts it, bushfire risk in Australia is evolving into “one of the most complex and consequential natural perils,” demanding a constant rethink as climate and exposure shift. 

Gallagher Re’s analysis of the LA wildfires strikes the same chord: rising temperature and a “weather whiplash”, means severe, prolonged fire seasons are no longer a statistical fluke but a highly probable threat. 

Australian insurers find themselves facing a storm  – quite literally – of mounting losses, fresh from the severe hail and thunderstorms that hammered the country just months ago.  

The market may be disciplined, and the returns healthy, but nature’s volatility remains the ultimate unknown. 

People moves

There has been a flurry of notable appointments in the region since the beginning of the year.  

Chaucer Group has appointed Les Loh to the role of chief executive officer for Singapore, succeeding Margaret To, with Dan Bryan named as head of reinsurance for Asia Pacific. 

Hannover Re has appointed Kun Huang as CEO of its Shanghai branch. 

Willis has reshuffled its Asian natural resources and construction team with Nicki Tilney named head of natural resources Asia and Iris Chan head of construction Asia. Steve Hutchinson takes over from Chan as head of corporate risk and broking for Hong Kong and Macau. 

Do check out our weekly people move round-up to stay up to speed on the most important appointments in the region. 

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