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“In Malaysia, robust infrastructure and healthcare projects, ongoing healthcare financing reforms present opportunities for (re)insurance,” he said.

“Across Asean, demand for emerging specialty classes such as cyber, health, and climate-related insurance continues to increase as businesses and governments strengthen their resilience efforts.”

Meanwhile, the APAC reinsurance market, including Malaysia, is expected to remain generally soft over the next 12 months, supported by abundant capital and heightened competition among reinsurers

“Pricing momentum will continue to favour cedents, with greater flexibility expected in negotiations. The overall market environment should remain stable, aided by relatively mild catastrophe activity in early 2025,” said Ahmad Noor Azhari.

However, reinsurers will need to continue navigating a complex risk landscape.

“Challenges include increasingly soft market, pricing, heightened climate and catastrophe volatility, evolving regulatory frameworks, and demographic shifts that are reshaping longevity and healthcare financing. Geopolitical and trade uncertainties also require careful management,” he said.

“These dynamics call for careful portfolio management and a measured approach to balancing growth with long-term resilience.”

Cedent concerns

Meanwhile, for cedents, concerns lie in not only pricing volatility but also structural developments within each market, according to Ahmad Noor Azhari.

“In the short term, we believe that cedents are likely to remain concerned about pricing volatility across different lines, inflationary pressures, and the adequacy of coverage for emerging risks like cyber and climate-related perils

“Over the longer term, cedents are watching several structural developments with caution. Key among them is evolving regulatory frameworks, such as solvency requirements and the rise of climate-related disclosure requirements, which will influence capital management and underwriting practices.”

Besides, rising cat volatility worldwide, geopolitical uncertainties and trade disruptions, which will affect underwriting margins and portfolio strategies, are also weighing on cedents’ minds, he added.

Malaysian Re’s strategies

Despite increasing competition and softening market conditions, Malaysian Re’s strength lies in deep local knowledge and strong relationships, according to Ahmad Noor Azhari.

“As the largest reinsurer in Malaysia and the leading national reinsurer in Asean, we have built strong partnerships with local and regional insurers and reinsurers, giving us both scale and credibility in the markets we serve,” he said.

“Our retakaful division continues to lead innovation in this growing segment, while our active involvement in national initiatives has strengthened our legitimacy and trust among regulators and industry stakeholders.”

The reinsurer will continue expanding its international footprint will strengthening its domestic services.

“Domestically, we will keep investing in national schemes and partnerships that reinforce market resilience, such as agricultural protection, Perlindungan Tenang, and other financial inclusion and risk-pooling initiatives.”

Perlindungan Tenang is a national initiative of Malaysia that aims to expand the availability and quality of insurance and takaful solutions to meet the needs of the unserved and underserved segments of the population.

“Regionally and internationally, we are increasing our footprint across Asean and selected markets in Europe, the Americas, and Oceania,” he said, adding that the company is also diversifying into growth areas such as specialty lines, family retakaful, facultative protection, and cyber reinsurance.

Across Asean, Malaysian Re will maintain leadership in collaborative efforts, including the Asean Renewable Energy Pool (AREP) and technical workshops that help partners build capability and address emerging risks such as climate and renewable-energy exposures, Ahmad Noor Azhari added.

“We will continue doing what we have always done, which is standing by our cedants and supporting them through changing market conditions,” he said.

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Can you provide an overview of the current state of the reinsurance market in South-East Asia? What are the key trends and developments you’ve observed in recent years?

The recent few years have been relatively quiet in terms of market-wide headline insured losses for all the individual countries in the region. Nonetheless, the markets were not spared from the (re)insurance market hardening globally in the last two years. Though the extent of price hikes varied from country to country and from client to client, some were more impacted than the other. The market globally has begun to soften since the beginning of the year.

Some of the observations on the key trends and developments within the region include:

Underwriting practices are increasingly incorporating climate change and sustainability considerations in risk selection and portfolio management. The adoption rates vary across countries, largely influenced by the net zero goals set by the local regulators.

“We will continue to play a positive role in support of green energy via the ASEAN Renewable Energy Pool which is focused on solar and onshore wind operational power plants.” Ahmad Noor Azhari, Malaysian Re

In Cambodia, new regulations have been introduced for lead and follow markets, specifically addressing capacity limitations which favours companies with a higher credit rating.

There is a notable trend in government-related construction projects, particularly those involving flood mitigation, where flood sub-limits are being imposed. Traditionally, construction projects in Malaysia did not have sub-limits for flooding. However, due to the nature and duration of these projects, the introduction of sub-limits is welcomed by insurers and reinsurers as it allows for better aggregate management.

How are climate change and the growing frequency/severity of natural disasters affecting the reinsurance market in the region?

On the buyers’ side, we are seeing greater interest and usage of cat models from established vendors like AIR, RMS to quantify the company’s nat cat exposure. Certain more sophisticated clients have even gone to the extent of mapping their individual policy level nat cat exposure data and incorporating nat cat accumulation exposure into their underwriting and risk-taking. In general, clients are buying more cat covers.

On the sellers’ side, reinsurers are seeking more granular exposure data from clients instead of zonal aggregate SI and adjusting their risk pricing accordingly.

Reinsurers may also reduce their exposure in high-risk areas, imposing stricter terms and conditions or even exclude certain types of risks, based on the data received from the client.

Additionally, there is a growing emphasis on ESG factors by reinsurers when making decisions by evaluating the sustainability practices of the company.

Looking ahead, what are the key priorities and focus areas for Malaysian Re in South-East Asia?

ESG is one of the areas of focus for Malaysian Re. We will continue to play a positive role in support of green energy via the ASEAN Renewable Energy Pool which is focused on solar and onshore wind operational power plants.

As a whole, we look forward to expanding our presence in the region and becoming a prominent player in the South-East Asia, not merely as a transactional capacity provider but rather a collaborative partner for the long term. We will continue to cultivate strategic and lasting relationships with our partners/clients across the region as well as work closely with the national reinsurers in the region for the betterment of the industry.

Malaysia, being our home market, will always be close to our hearts. It is our core and our backbone. With all the signs suggesting the market is firmly back in the right direction following the market corrections we have undertaken since the megaflood back in 2021, we can now look towards further to strengthen our position in the market.  This includes enhancing our technical capabilities to better serve the growing needs of the market which include cyber, health and credit etc., as well as working closely with the regulators on market schemes and product innovations to close the protection gap for the benefit of all Malaysians, in particular the under-served segment.

As we chart our growth moving forward, our aim is to expand from being the national reinsurer for Malaysia to becoming a reinsurance partner of choice for our South-East Asia clients, an ASEAN reinsurer for ASEAN.

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