Full Capacity: Aspen rumours hint at Sompo’s global bet 

August 23 2025 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.  

Tighter leash. Japanese regulator, the Financial Services Agency (FSA), is set to strengthen the oversight of the insurance sector with a new dedicated regulator. 

The restructuring of the FSA, the first in nearly a decade, will see the creation of the tentatively named Asset Management and Insurance Supervision Bureau in FY26. 

The move is more than just bureaucratic reshuffling and is aimed at restoring the trust in the industry that lays in tatters following a series of brazen scandals. 

Collateral damage. The explosive Vesttoo bankruptcy is making news again as a new lawsuit claims that Aon not only provided the gunpowder but also lit the fuse.  

A trust representing Vesttoo’s creditors has thrown a massive legal grenade, suing Aon and China Construction Bank for alleged fraudulent conduct and other wrongdoings that inflicted devastating losses upon the insurance industry and led to Vesttoo’s bankruptcy. 

At the heart of the carnage is Aon’s “Collateral Protection Insurance” (CPI) product. The lawsuit paints a damning picture: that Aon knew its CPI was a flawed instrument – inherently risky and incapable of delivering on Aon’s promises – yet they aggressively scaled it, inducing Vesttoo and others into assuming billions of dollars of insurance and reinsurance risk. 

The lawyers representing the creditors, which include Markel and Beazley, said Aon’s CPI transactions were the primary cause of Vesttoo’s downfall and the industry-wide chaos that it created.  

Markel had, in fact, earlier this year decided to run-off the troubled CPI business. 

Less isn’t more. In a bid to streamline and strengthen the domestic reinsurance industry, Indonesia plans to merge three state-owned reinsurers. While the proposal looks tidy on a bureaucratic flowchart, Fitch Ratings highlights that it could hurt local insurers by reducing domestic reinsurance support, as the combined entity would be weakened by negative capital and stretched leverage. 

The consolidation of Reasuransi Indonesia Utama (Indonesia Re), Reasuransi Nasional Indonesia (Nasional Re) and Tugu Reasuransi Indonesia (Tugure), could dilute the sector’s capital profile, rather than strengthen it, Fitch warned, since two of the three reinsurers are poorly capitalised and one has a large deficit. 

Deal digest. Philippine non-life carriers FPG Insurance and The Mercantile Insurance have announced a definitive agreement to merge their businesses. 

The combined entity, to be named FPG Mercantile, will have an estimated combined GWP of US$175 million and the combined market share will place it among the top four insurance companies by GWP in the crowded Philippines’ non-life sector. 

Could this well be the beginning of consolidation in a highly fragmented market?   

Slippery slope. The APAC energy insurance market is a bloodbath of competition – and buyers are loving it. A flood of capacity and a quiet catastrophe season are crushing rates, granting clients unprecedented leverage and broader coverage. 

Clients are rightly enjoying their moment in the sun, securing broader coverage and improved terms with ease. The scars from previous soft markets, and that memory breeds a hardened selectivity.  

While the industry is compelled to compete on straightforward operating risks, underwriters are digging in their heels on complex, high-exposure placements like offshore construction or deepwater drilling. The underwriting discipline hasn’t vanished; it has just become more concentrated. 

So, yes, it’s a punishingly soft market, but it’s not an irresponsible one. Insurers are walking a tightrope – pushed by the pressure to maintain market share but pulled by caution over catastrophic losses that such a soft market invariably invites.

Aspen’s quick flip and Sompo’s global bet

Just months after its much-hyped market debut, Aspen Insurance is back in the headlines with a report that Japan’s Sompo is circling for a takeover sending the specialty carrier’s shares soaring.  Following a report the Insurance Insider, the shares have rallied 18%.  

Apollo Global Management, the savvy PE giant behind Aspen, took the Bermudian (re)insurer public in May. So a sale to a strategic buyer seems like an unusual strategy for the owner. Apollo, which has been invested in the business since 2019, made a partial exit through the IPO and currently holds 81.2% stake in the business. 

Considering that Apollo has held on to the portfolio company well into the brink of PE’s typical investment horizon, it would be surprising if it hadn’t shopped around for a buyer before it settled on an IPO. The public listing may well have been a way to set a price tag and keep the asset warm. 

Reports last year had suggested that Apollo was seeking a US$4 billion valuation for the (re)insurer, however, the listing, which raised about US$400 million, valued the business at about US$2.76 billion. 

The stock’s performance since debut has been less than stellar. Apollo’s shares are also subject to a 180-day lock-up following the May 8 listing. 

Whether this particular deal closes is almost beside the point.  

There is no doubt that Sompo, like its peers MS&AD Group and Tokio Marine Holdings, isn’t dabbling – it’s on a mission.  

Forced by regulators to unwind billions in crossholdings, the company is sitting on a war chest and under intense pressure to grow. And furthermore, it has set an audacious goal to double its market cap and profits by 2030. 

Sompo will have to add US$30 billion to its market capacity in the next five years to meet that target, which would take more than one deal.  

Sompo sold about US$3 billion in crossholding in the last financial year, and its remaining holdings are valued at about U$8 billion. The insurer said in May that it will invest 50% of its windfall from the unwinding on future growth, which includes M&A and about 30% will be returned to shareholders. 

And with overseas business already accounting for over 65% of its profits, Sompo wouldn’t just be looking abroad, but betting its future on it. 

People moves

Howden has appointed Chris Hughes as CEO of its broking business in New Zealand from November following Nigel Wallace’s elevation to chairman. 

Liberty International Insurance has handed Ann Dang an expanded role of chief of staff for Asia Pacific. 

Singaporean insurer Great Eastern has appointed Li Choo Kwek-Perroy as managing director for group integrated propositions and platforms, effective from September 15. 

To keep up with the latest appointments across the region, don’t miss our weekly people move roundup.    

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