SIRC 2026: ‘Cyber and AI-related risks are some of the most challenging risks emerging in the region’

November 4 2026 by and

AM Best’s Greg Carter, managing director for EMEA and Asia Pacific, sees further APAC pricing pressure into 1.1, with cyber and AI the region’s toughest emerging risks.

How do you view the APAC reinsurance market going into 1.1?  

As is the case globally, we are seeing a softening reinsurance market heading into 2027. That said, overall results are expected to be strong for 2026, and we expect almost all major reinsurers to comfortably cover their cost of capital for the year.  

Headline rate reductions are most pronounced for US property business, while the Asia-Pacific region remains less exposed to the cyclical pressures. However, rates are declining across the APAC region, and we expect to see further pressure on pricing.  

We may see some weakening of terms and conditions, and reinsurance attachment points creeping lower as the excess capacity in the market responds to competitive pressures.  

How do you see the current risk environment in the region?  

Some of the most challenging risks emerging in the region at present are cyber and AI-related risks. Cyber has been a growing market for at least two decades, but the pace of evolution of risks makes this something of a permanently emerging risk.  

AI is a newer risk, and the major challenges include property and construction risks associated with the huge demand for data centres as well as the emergence of AI liability which encompasses a range of potentially longer tail liability risks. 

How do you see carriers balancing growth and risk given the current soft market conditions?  

For our rated companies, this is a major talking point of our discussions. Companies with developed risk management processes and controls are better positioned to balance growth in a declining market. However, recognising when business falls below price adequacy and is failing to meet cost of capital targets is a major challenge for the industry. 

There is a lot of talk about capital and cycle management, how do you see primary insurers negotiating a soft market environment and tighter capital and solvency regimes?  

From a primary insurer’s perspective, this is a very interesting market. For most insurers, their cost of capital is rising as equity investors demand a higher return over the risk-free rate. For bond investors, rising interest rates mean higher expectations of yield.  

Reinsurance, as a form of capital, is the only source of capital falling in price and this is likely to encourage insurers to make greater use of reinsurance as a capital management tool.  

Are there any other notable trends shaping the (re)insurance markets in APAC? 

India’s Gift City is reshaping competitive dynamics. The growing presence of foreign reinsurers in Gift City has expanded the market’s reinsurance capacity and given cedents more choices, but at the same time also intensified market competition.  

Additionally, the Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance merger in 2027 could reduce overall reinsurance demand and intensify competition among reinsurers, with potential spillover effects in other markets.  

Lastly, after the last hard market cycle, large Asian insurance groups have implemented several strategies to reduce their vulnerability to sudden spikes in reinsurance pricing or reductions in market capacity. These include geographic diversification, establishing strategic partnerships to secure stable reinsurance capacity, conducting group-wide centralised reinsurance negotiations to enhance bargaining power, and diversifying capital sources through insurance-linked securities and other alternative capital solutions. 

How do you assess the AI readiness among carriers in the region?  

To date we are seeing many insurers and reinsurers making use of AI and some are obviously more advanced than others in their journey. Many carriers are using AI to improve operating efficiency and identify process redundancies and fraud.  

We are seeing fewer cases where AI is being used significantly in the underwriting process. However, this is an aim for many carriers and those companies able to leverage this advancing technology may be able to gain a significant advantage over competitors.  

One risk we see on a global level is that primary insurers seem more advanced than reinsurers in the use of AI, and this could develop into an asymmetry of information or skills between the primary insurance and reinsurance markets.  

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