As insurance markets around the world continue to evolve, organisations must navigate a dynamic landscape shaped by shifting pricing trends, evolving underwriting approaches, and emerging risk exposures. Across key lines of business—including automobile, casualty/liability, cyber, directors and officers (D&O), and property—insurers are adapting to a complex environment influenced by economic uncertainty, regulatory changes, and rising loss trends.
According to Aon’s latest Global Insurance Market Insights Report, market conditions remain varied across different regions and lines of business. In Asia, insurers are focusing on managing capacity effectively, while responding to heightened claims activity and regulatory scrutiny.
Asia market overview: competitive landscape and capacity trends
Overall, market conditions in Asia are becoming more favourable as local and international insurers compete for the most desirable risks. However, Japanese companies continue to face a challenging market, with capacity constraints and pricing pressures expected to persist into 2025.
Capacity for energy transition-related risks is a key topic for insureds, insurers, and regulators, reflecting the region’s broader push towards sustainability. As insurers seek growth opportunities, a divergence is emerging between international and domestic insurers in terms of pricing strategy and risk appetite.
“The conversation around catastrophe risk is evolving. Insurers are not just pricing for today’s risk, but are also adjusting coverage structures to reflect future exposures.”
“The market in Asia is at an interesting stage of the cycle, with softening seen across most product lines and geographies,” said Neelay Patel, Aon head of growth for Asia. “However, exceptions remain, with a growing divergence in pricing and risk appetite between international and domestic insurers. As we move into 2025, we anticipate a continuation of broader market softening.”
Pricing trends and capacity management
Insurance pricing remains a key concern for businesses worldwide. While certain lines of business are experiencing moderating rate increases, others continue to face upward pricing pressure.
“In Asia, we are seeing a more stabilised pricing environment compared to previous years, particularly in property and casualty,” Patel said, noting that while rate increases are decelerating, insurers remain cautious about risk selection.
Property insurance, in particular, has seen modest rate increases in most Asian markets, driven by natural catastrophe exposure and inflationary pressures. However, capacity remains constrained in regions prone to severe weather events, with insurers focusing on risk-adjusted returns.
“The conversation around catastrophe risk is evolving. Insurers are not just pricing for today’s risk, but are also adjusting coverage structures to reflect future exposures,” Patel added.
Shifting underwriting approaches
Underwriters are adopting a more data-driven approach to risk assessment, leveraging analytics to refine pricing models and portfolio strategies. In Asia, underwriting discipline remains a focal point, particularly in casualty/liability and Cyber lines.
For casualty/liability, insurers are paying closer attention to long-tail exposures, particularly those linked to global supply chains and export markets. Rising social inflation in jurisdictions like the United States is also prompting Asian insurers to reassess their appetite for US-exposed risks.
In Cyber insurance, demand continues to surge, yet underwriting scrutiny has intensified. The frequency and severity of cyber incidents, including ransomware attacks and data breaches, have led to higher retentions and stricter policy conditions.
“Cyber remains one of the most dynamic segments of the market,” Patel said. “While premium growth is strong, insurers are becoming more selective, with coverage terms tightening for industries perceived as high risk.”
D&O market: stabilisation with nuances
The D&O market has been one of the more volatile segments in recent years, but signs of stabilisation are emerging.
“In Asia, we’re seeing improved capacity and more competition, which has led to softening rates for well-performing risks,” Patel said.
“Given the more favourable market conditions, organisations should explore opportunities to expand coverages and adjust limits and deductibles where appropriate.”
However, US-listed Asian firms still face heightened securities class action exposure, keeping premiums elevated for certain insureds.
Insurers are also increasingly scrutinising environmental, social, and governance (ESG) factors, with organisations facing ESG-related litigation risks expected to encounter more stringent underwriting assessments.
Property and natural catastrophe risks
Property insurance markets in Asia remain influenced by catastrophic weather patterns and the increasing frequency of extreme events. Insurers are adjusting policy structures, with higher deductibles and revised sublimits becoming more common.
“The challenge for property insurers is balancing affordability with sustainability,” Patel said. “We’re seeing insurers introduce parametric solutions and innovative structures to manage catastrophe risk in a way that aligns with corporate risk management objectives.”
Expert advice for risk managers
As insurance markets continue to evolve, businesses must stay informed and agile, working closely with their insurance partners to navigate the complexities of an ever-changing risk environment.
By leveraging data-driven insights, proactive risk management, and strategic insurance placement, organisations can secure optimal coverage terms while mitigating emerging risks.
“Given the more favourable market conditions, organisations should explore opportunities to expand coverages and adjust limits and deductibles where appropriate,” Patel added.
“Maintaining a strong risk management program and clearly demonstrating it to insurers will be critical in securing the best terms. Japanese corporates, in particular, need to ensure their insurance programs align with their risk profiles and market conditions. Accessing international capacity will require high-quality risk data and robust analysis.”
For further details, feel free to reach out at [email protected].
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Neelay Patel Head of Growth Asia, Aon |
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