SIRC: Willingness from reinsurers to consider clients’ goals: Gallagher Re’s Mark O’Brien

November 3 2025 by

Clients have got choice for the first time in a few years with the market in a much healthier position this year on the build up to the renewal, said Mark O’Brien, managing director and head of Asia Pacific at Gallagher Re.

“The sector is in a much stronger position than in recent years, creating more options for buyers. We’re not close yet to being back to where we were pre-2023 when the market turned, but we’re slowly getting that way,” O’Brien said.

“I think that there’s for sure a willingness on the reinsurer’s part to consider what clients are trying to achieve.

“Reinsurers are in growth mode. So now results have improved, markets healthy and vibrant again, reinsurers are looking to grow and the moment that happens then you do trigger competition.”

This renewed competition has already led to a noticeable softening during 2025, and O’Brien said it is not “unreasonable to assume that the softening will continue into the 1.1 renewal”.

Easing conditions

“There’s for sure a willingness on the reinsurer’s part to consider what clients are trying to achieve,” he said.

This shift is evident in the proportional reinsurance market in Asia, which O’Brien noted has been “challenged for a couple of years”.

He attributed past difficulties to soft primary markets, which forced reinsurers to protect their margins by tightening terms and conditions, including introduction of “long sliding scales of commission, tight event limits, loss caps, [and] loss participation clauses”.

With improved underlying results, the pressure is now easing.

“Clients are putting a lot of pressure on reinsurers to relax some of the stringent conditions that were imposed on them,” O’Brien said, adding that clauses like loss participation clauses and loss corridors are already being relaxed.

However, he does not expect a wholesale rollback.

“I don’t think we’re necessarily going to see a relaxation of event limits,” he added, noting that natural catastrophe losses in Asian proportional contracts have been a persistent concern.

Bespoke structures

Structured solutions are emerging as a requirement for Asian carriers, who have traditionally “historically bought quite low down”, to sustain frequent losses at the lower end of the program and reducing volatility of their balance sheets.

“I don’t think there is a natural willingness for the reinsurers just to drop back down again. I think that really is still a space for bespoke customised structures,” he said.

“The appetite to deploy capacity at that level has increased. But it has to be bespoke and it has to be structured.”

“Most insurance companies in particularly in the Southeast Asian region would buy beyond what the model would suggest. There isn't a set prescribed guideline in some territories.”

Mark O’Brien, Gallagher Re

Gallagher Re has done an “awful lot of work around bespoke structures that sit in that area”, he added. What reinsurers have done in conjunction with Gallagher Re is look at multi-year structures.

These sophisticated, multi-year arrangements are proving effective for Asian clients. Detailing how these structures help, O’Brien said: “The recognition of reduction in volatility is brought through the structure by a profit commission.”

This mechanism allows clients to crystallise profits in good years or maintain coverage terms after a loss. “It gives them certainty,” he added.

For reinsurers, these deals are about more than just a single transaction.

“Reinsurers are actually increasingly recognising that it’s a strategic partnership,” O’Brien explained.

“By offering that capacity and offering that structure, they have got a long-term partnership with that buyer,” which in turn provides access to other parts of the client’s portfolio.

Future demand

Looking at demand growth across the region, O’Brien does not anticipate a “sudden surge” in limit purchases in Asia, ex-Japan.

“Most insurance companies in particularly in the Southeast Asian region would buy beyond what the model would suggest. There isn’t a set prescribed guideline in some territories,” he noted.

Meanwhile, consolidation and diversification are likely to drive some growth.

He pointed to markets like Indonesia, where regulatory changes are driving M&A activity, as a key area where reinsurance “will really come into the fore.”

“Reinsurance can be used to de-risk portfolios during a sale or to support the capital requirements of newly combined entities,” he added.

For more mature insurers, the focus is on growth beyond saturated home markets.

“A lot of the insurance companies are quite saturated, competition is high so they’re looking for either product diversification or territorial diversification,” O’Brien said.

Gallagher Re is actively supporting clients in this endeavour, whether by helping them build out new product lines like cyber or renewables, or by diversifying portfolios MGAs.

“We’re going through this phase at the moment that’s quite exciting in the next five years,” O’Brien said.

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