SIRC 2026: Oversupply of capacity to drive APAC softening despite intensifying risk: Edme’s Kunal Khanna

November 5 2026 by

The softening of India’s reinsurance market continues to outpace the broader Asia Pacific region thanks to strong reinsurer appetite for growth and the country’s ongoing reform agenda, according to Edme Insurance Brokers.  

Kunal Khanna, managing director of reinsurance and global head of natural resources at Edme, said that the Indian reinsurance broker expects a continuation of the market softening seen throughout 2026 into the 1.1 renewals.   

“We have entered the soft cycle for the last two years,” Khanna said. “Globally, we’ve seen an average softening of about 15-20%. India in the commercial space has seen a lot more. 

“The fire engineering numbers have been reasonably about 40-50% soft, which has been a matter of concern. That is purely because of oversupply of capacity in the region. And with new regulations, new capacity coming in India, we have Gift City, where there are more than 20-25 reinsurers opening shop.” 

Cedents have been able to use the softening to their advantage to obtain more favourable terms on their reinsurance coverage, Khanna added, 

During 2026, natural catastrophe losses across APAC have remained relatively benign, with a notable infrequency of US$1 billion-plus insured loss events, although the region has suffered from several high-profile catastrophes recently, including the flooding in Bangkok in September, the Kumamoto earthquake in July, and the landslide in Nepal in August.  

The events have not been enough to change the direction of the reinsurance market heading into the 1.1 renewals, although high frequency attritional losses are on the rise in APAC, particularly due to the arrival of El Nino this year.  

“When it comes to the turnoff cycle, it all depends on what kind of events trigger, what kind of losses we see in the market, which are basically a catalyst for the start of a new hardening cycle,” Khanna said.  

“With time what we are seeing is that nat cats are no longer a low frequency, high severity kind of event. Nat cat is slowly becoming a high frequency, high severity kind of event.” 

The low insured losses in 2026 mask escalating climate risk, with the region suffering from a significant protection gap that remains a major challenge for governments, including India.  

According to Khanna, India’s reinsurance market has been “astonishingly soft” compared to the wider APAC region, thanks to an influx of global capacity eager to gain exposure to the country’s rapid economic expansion, and the impact of the government’s insurance reforms, which are intended to attract more global capital to India and tackle the country’s sizable protection gap.  

“It will continue to remain soft at least for this year,” Khanna said. “No questions about it, I am quite certain about that.” 

“I think people will not bend too much on the underwriting terms and conditions because every market and every risk after a period of time identifies what are the terms and conditions we are not compromising at all.”

Kunal Khanna, Edme Insurance Brokers

At the 1.1 renewals, there will be intense pressure on reinsurers to relax terms and conditions, although this will be fiercely resisted by the industry, according to Khanna.  

“I think people will not bend too much on the underwriting terms and conditions because every market and every risk after a period of time identifies what are the terms and conditions we are not compromising at all,” he said.  

According to Khanna, reinsurers are “more flexible” about paying higher commissions than relaxing terms and conditions.  

“It’s the terms and conditions that eventually bring the losses to the business, not the commissions,” he added. 

Reinsurers are closely monitoring tail risks from the geopolitical disruptions due to the conflict in the Middle East, such as supply chain disruptions, higher inflation and slower economic growth, and new and emerging risks from the AI and data centre boom. 

The rippling effect of the upheavals will be critical to the discussions during the coming 1.1 renewals across APAC, according to Khanna.  

“There is a lot of volatility in the geopolitical space,” he said. “If you look at the risk parameters and the top five risks for the last four years, you see cyber as one of them, the biggest one. You never saw geopolitical ranging in the top five risks. 

“For the last one and a half to two years, geopolitical has come number one.” 

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