Full Capacity: Softening market tests underwriting discipline

May 16 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.   

M&A spotlight. Marsh is set to acquire Tokyo-based energy giant Eneos Corporation’s insurance units – broker Eneos Insurance Service, and the insurance business department of Eneos Material Trading in Japan. The transaction is expected to close in the third quarter of 2026.  

Meanwhile, private equity firm Hillhouse Investment acquired Marsh’s high-net-worth wealth and life insurance brokerage business, Mercer Private Client Services. The Asia-led unit, founded in 2003, offers wealth protection and integrated life insurance solutions to private wealth management clients. 

Malaysia’s RHB Bank has secured approval from Bank Negara Malaysia to reopen negotiations with Tokio Marine Asia on the potential sale of its general insurance unit.  

Under the proposed deal, RHB Insurance would merge with composite carrier Tokio Marine Insurans (Malaysia), with RHB retaining up to a 35% stake in the combined entity. 

Asia expansion. The Ardonagh Group has hired Jason Anthony to lead its efforts to build a pan-Asian MGA at scale, expanding its existing MGA operations in Hong Kong, Charter Union, and the product line focus and geographic reach across Asia. 

New leader. Howden announced a leadership transition in its Hong Kong business, effective from July 1, with Alaric Lee appointed as CEO, succeeding Alfred Sham, who will relocate to Singapore to take on the role of chief strategy officer for Asia. 

Planning ahead. Australian insurer IAG has unveiled ambitious growth targets under its refreshed Ambition 2030 strategy, aiming to lift gross written premium to US$18.1 billion and expand its customer base to more than 11 million. 

Marine pool. The government of India has launched the Bharat Maritime Insurance Pool (BMIP) and issued its first policies to Indian shippers. The US$1.5 billion BMIP, backed by a US$1.4 billion sovereign guarantee, provides risk cover for Indian vessels operating on international sea routes, including war and high-risk zones. 

Strategies diverge

First-quarter results from the big reinsurers – Munich Re, Swiss Re and Hannover Re – are, on the surface, exactly what we’ve come to expect: big profits, strong underwriting, and the kind of combined ratios most carriers would envy.  

Munich Re’s 66.8% combined ratio says as much. Swiss Re (79.5%) and Hannover Re (83.6%) aren’t far behind. After last year’s wildfire-hit first quarter, this was always going to look good. And it does. 

More important than the first quarter performance though is the signals from the April1 renewals, which tell you how the reinsurer’s are reacting to a softening market.  

The 1.4 experience of the reinsurers show that market that is clearly losing some of its edge.  

The industry’s biggest players are responding in very different ways. Munich Re is pulling back hard, cutting nearly 20% of its April 1 book.  

For Munich Re, the April renewals represent about 11% of its total book of business, so in the larger scheme of things it isn’t a massive reduction, but it is still an important signal.  

Swiss Re trimmed more selectively – treaty volume down by 8% at 1.4 renewals – due to a “more challenging” pricing environment and a continuation of the market softening seen during 1.1 renewals. 

The reinsurer said the outcome reflects continued discipline and active cycle management amid a more challenging pricing environment. 

Hannover Re, meanwhile, is leaning in — growing where others are retreating. The reinsurer’s premium volume at 1.4 increased by 18.8%. 

“Even though price pressures still have the upper hand in property and casualty reinsurance, our superb positioning enabled us to significantly expand our book of business – especially in the 1 April renewals,” CEO Clemens Jungsthöfel said. 

That divergence matters. It signals that this is no longer a market moving in lockstep. Risk appetite may be fragmenting. 

While reinsurers are still talking confidently about profitability, there’s a subtle shift in tone.  

Munich Re CFO Andrew Buchanan flagged the challenges ahead.

Hitting revenue targets will get tougher in a softer market. Growth won’t come as easily. Discipline will be tested. 

Then there’s the bigger risk lurking in the background: inflation. 

The war in the Middle East hasn’t hit reinsurers hard – yet. Rising energy prices are already feeding through into inflation, and that’s where things get uncomfortable.  

Higher claims costs, pressure on reserves, volatility in investment returns – the second-order effects could prove far more significant in the medium term than losses from the conflict. 

Meanwhile, Lloyd’s chief of market performance Rachel Turk has warned syndicates that a return to past soft-cycle missteps will not be tolerated, stressing that failure to deliver sustainable profits will prompt intervention.  

She added that the time for subtlety has passed, with portfolio management set to be a key area of focus for the market. 

For now, the numbers look strong. But they always do when the wind is at the industry’s back. 

The more interesting question is what happens when it shifts. 

People moves

In notable people moves this week, Sompo confirmed the appointment of Kelvin Woo as chief distribution officer for Hong Kong, Macau and Taiwan, a move InsuranceAsia News first reported. 

Sompo also hired Sarah Lee as multinational network manager for APAC. 

Swiss Re has elevated Australia, New Zealand CEO Trent Thomson to global specialty head.  

Russell Hails joined Gallagher Re as APAC MGA solutions head. 

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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