SIRC 2026: India, AI boom transform APAC’s credit and surety market: Peak Re

November 5 2026 by

The opening up of India’s market and the funding behind the AI boom are the biggest long-term growth drivers for Asia Pacific’s credit and surety market heading into 1.1 renewals in the region, according to Kathleen Koh, managing director of credit and surety at Peak Re in Hong Kong. 

Koh said that the Hong Kong-based reinsurer expects a continuation of the multi-year softening in the region’s credit and surety market, with an abundance of capacity fuelling intense competition between reinsurers.   

“In credit and surety, we are in a soft market, which we have been since the end of the Covid-19 pandemic, as the line has been performing well,” Koh said. “Similar to other lines of business, it’s a soft market and there’s an abundance of capacity. 

“The competition is getting more and more intensive every year as reinsurers seek higher growth. Growth is quite a challenging task as you are facing a soft market which heightens competition.” 

This year, the region has faced macroeconomic turbulence because of the conflict in the Middle East, which has disrupted global supply chains and caused a spike in energy prices, leading to inflation and higher interest rates.  

Despite these headwinds, losses in the credit and surety market in APAC have remained low, fuelling the softening, although the market has recently seen an uptick in claims with defaults on the rise.  

“We do expect the market to continue to remain soft in 2027,” Koh added. “While we also observe that the loss ratio is starting to normalise as claims increase, it is still within a very manageable level.” 

In APAC, Peak Re sees two major long-term opportunities for strategic growth in credit and surety, which extend far beyond the current softening cycle, including tapping into the rapid expansion of India’s nascent surety market.  

In 2022, the Insurance Regulatory and Development Authority of India (IRDAI) kickstarted the market’s development through new regulations governing the surety market, opening an insurer-driven alternative to bank guarantees.  

The new rules were subsequently softened in the following year to make it easier for insurers to offer surety bonds in India.  

Amid India’s rapid economic growth, India’s government has embarked on a massive INR130 trillion (US$1.4 trillion) infrastructure building drive, known as the National Infrastructure Pipeline.  

Supporting this growth via the surety market is a major opportunity for the reinsurance industry in India, which Peak Re sees as one of its “key markets” across its entire P&C business, according to Koh.  

“India is one of our key markets in Peak Re for credit and surety and in the wider context of our P&C lines of business as well,” she said.  

“The growth in India is tremendous, and this trend is expected to continue for the next three to five years as there are significant infrastructure and construction needs. Therefore, surety capacity will be in big demand.”

Kathleen Koh, Peak Re

The coming years will see strong demand for surety in India, driven by construction-related risks, Koh added.  

“The growth in India is tremendous, and this trend is expected to continue for the next three to five years as there are significant infrastructure and construction needs. Therefore, surety capacity will be in big demand.”  

Peak Re also sees the ongoing AI boom and associated data centre construction as a massive opportunity in APAC, although it also brings with it new and unquantified risks for insurers.  

“In the past one to two years, we see the AI boom with data centres coming up in China and also in other parts of Asia,” Koh said. “That is definitely a trend that we need to be aware of, in particular in markets where the risk landscape is fast changing.” 

Peak Re has been receiving more requests from cedents for coverage on AI and data centres, which is expected to continue into the coming 1.1 renewals.  

“Since last year, we see an increase in interest from cedents on AI and data centres,” Koh said. “There will be more and more such demand coming from cedents asking for additional capacity or limits over the coming months. 

“These constructions of data centres are going to be mega projects, and we need to watch the accumulation of risks.” 

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