The post Asia Pacific sees larger property cat rate reductions during 1.1 renewals: Gallagher Re appeared first on InsuranceAsia News.

The post Gallagher Re names Parrus Kunvarji as APAC executive director for customised solutions appeared first on InsuranceAsia News.

The post Global insurtech Q3 investments hit US$1.01bn as market shows consistency in fundraising: Gallagher Re appeared first on InsuranceAsia News.

“I always like a motivated reinsurance market because it usually produces some innovative structures and people are willing to talk about alternative structures. 

“That market has always been alive out here, but we’ve found more players coming in and saying, yes, we can consider structured solutions, longer-term arrangements, which is helping the clients out to achieve their goals because our clients want to grow their business as well,” he said.  

“Since the last 1.1 renewal, we have seen reinsurers being more flexible and cedents getting a slightly easier, more straightforward renewal.” 

With both insurers and reinsurers pursuing growth, Jones expressed a strong sense of optimism for clients during the 1.1 renewals. 

“There’s a lot of chat around keeping discipline and I completely understand that. But I think there is more capital available and they want to use their capital.  

“So that in itself should help us to create some more innovative products which are going to help maybe with the attritional end of the business,” said Jones.  

“Of course, there’s still pressure in the system, but I would like to think that there’ll be some further flexibility and open-minded solutions which obviously will be at the forefront.”  

As cedents navigate challenges, such as the changing model of agency business going over to digital as well as developing risks, including cyber and the energy transition, reinsurance can provide essential support, according to Jones.  

“And in the longer term, if they want to go into new products, there is an appetite from the reinsurers, who are keen to make strategic partnerships to manage portfolios in a market that’s becoming a little bit more flexible.  

“I think there’s a good opportunity for clients to make the most of that and help them grow their business.” 

Besides, the growing MGA space, which is stepping into the specialty line, is also providing a consistent immune capacity, which is going to be of use in the future, he said.    

“Yes and it’s giving cedents more options and I think that’s a positive thing.”  

Growth in Asia  

The primary insurance markets are having challenges in growing, according to Jones.  

While India and China are seeing “definite growth” with many positive indications, insurers in certain regions of Asia, such as Korea, are facing challenges to expand their domestic business. 

“But what’s quite exciting is that they’re now looking overseas. We saw recently the headline purchase of Fortegra by DB, Samsung and their Canopius investment, etc. 

“I find that very energising for the region and it’s great to see more Asian-based entities going global and overseas, they start bringing product back. And from our viewpoint, we can bring real value with our global reach. 

“In my view, Asia, at the moment, is a pretty dynamic and healthy market,” he said, adding that it’s important to find innovative solutions to match the motivated market, where re(insurers) both want to grow 

“My key message is we need to match the motivated reinsurance market. 

“This is so that we can get great results for our clients and align with their own goals. If we can match the two, it’ll be a very successful outcome.” 

The post Motivated market drives appetite for alternative structures: Gallagher Re’s Jones appeared first on InsuranceAsia News.

For many years now, insurers in the APAC region have been taking advantage of sophisticated reinsurance structures that can smooth out volatility over several years, or help support solvency.

But as the cycle moves on, it is a good moment for insurers to take stock of their strategy and consider other solutions that may add value.

In this article, Gallagher Re’s head of strategic solutions for APAC, Roshan Perera, and global practice leader for customised solutions, James Mounty, give an overview of the volatility and capital management challenges currently faced by clients in the region – and offer some ideas for how to meet them.

1. What are the most pressing balance-sheet challenges faced by insurers in the APAC region, at this point in the market cycle?

James Mounty: One of the key challenges is managing the net (or retained) volatility associated with natural catastrophes – in both property and motor, which are significant business lines across the region.

For those exposures, the level of retention on excess of loss (XoL) reinsurance programs is probably higher than clients would like. So they are looking for reasonably priced mechanisms to buy out the volatility, because it supports their earnings. Organisations that manage volatility well tend to be recognized and rewarded by owners and/or the investor community.

Roshan Perera: Insurers’ minimum capital requirements are increasing in some markets, for example Indonesia. This can drive consolidation and M&A activity, as has already happened in the Philippines. Structured reinsurance transactions, such as loss portfolio transfers (LPTs), can help support such deals – for example, in situations where a buyer is interested in acquiring an insurer, but wants to divest a particular line of business.

2. Several markets in Asia-Pacific are either introducing or updating risk-based capital (RBC) regimes for monitoring insurers’ solvency. Can structured solutions help here?

RP: In our APAC market report, we talk about the five forces shaping insurance business in the region – and one of them is the harmonisation of regulation. There are only two markets that are still on a pre-RBC framework – Vietnam and India – and they are both looking to introduce an RBC framework over the next three years.

While insurers in both markets already make good use of structured solutions, we are anticipating that there will be growing interest in capital-supporting reinsurance structures, and potentially retrospective deals to remove unwanted liabilities.

3. What are the structured solutions that APAC clients typically use, and how do they work?

JM: The implementation of a structured solution is often about customising a traditional reinsurance product so that it achieves a targeted outcome in the most cost-effective manner. Our first step will be to understand what the client wants to achieve.

When the outcome required is capital relief, often the solution is a structured quota share.

These are a really great way for insurers to finance expansion without overextending their capital base – or ceding too much margin to reinsurers.

Under a surplus relief quota share or SRQS arrangement, the ceding commission rate can slide up or down depending upon the loss ratio performance. This rewards the ceding company if results are better than the provisional loss ratio plan, but it will also protect the reinsurer if the outcome is worse than plan.

Where clients are looking to control net volatility, we often use the multi-year XoL structure. These have been very popular across the APAC region for many years, as a way of managing the frequency risk at the bottom end of programs.

If the insurer avoids a negative outcome in year one, it can bank the profits via an early commutation and renegotiate the deal. If the loss experience is less favorable, then they have the security of knowing that cost and capacity are locked in for a further two years.

There are also good opportunities to explore aggregate XoL covers in the current market, and structured aggregate XoL is no exception. Since structured solutions can often attach lower, you might create a mix-and-match approach – a structured solution attaching closer to the expected loss, with conventional aggregate protections attaching higher up the probability distribution.

Ultimately, we are looking to support our clients to achieve their financial objectives in the most efficient manner possible. Regardless of where we are in the market cycle, we think there are always reasons to consider some degree of customisation.

4. Can you give some examples of how APAC clients are making use of these kinds of solutions?

RP: Take increasing capital requirements as an example. Recently, we helped one client in Indonesia that was quite close to the statutory minimum for the dynamic solvency requirement. We put in an arrangement called a financial-year quota share (FYQS) to help address that. These types of structures combine prospective and retrospective cover, giving immediate and significant capital relief for the duration of the financial year.

Another recent deal in Malaysia was for a client who had grown their motor insurance business quite rapidly, to the point where they could not meet the capital requirements to fund that growth. So they did an LPT deal to help free up those funds so they could continue to grow.

5. What are reinsurers’ current appetite for structured solutions, and how does that affect their cost?

JM: Over the past year, we have seen a significant increase in the number of reinsurers telling us they are interested in writing structured business – and we do think this will lead to some modest pressure on margins. Coming into this renewal, there are at least five large new reinsurers for us to talk to, and perhaps as many as 10.

RP: I have also had several conversations with new markets who are establishing themselves in APAC and have told us they are keen to do structured deals.

We are aware of several global reinsurers active in the region that are making hires and have plans to enter this market, as well as regional Asian reinsurers that have been ready to engage on structured programs.

The post Reinsurers’ growing enthusiasm for tailored solutions in APAC appeared first on InsuranceAsia News.

Gallagher Re wants to be the “go-to broker” through high-profile hiring and complementary M&A.

“We’re always looking to grow,” O’Brien stated, setting the tone for the company’s ambitious agenda.

“On the people front, we are always looking to add quality individuals to our organisation and we’re looking to add complementary businesses,” he said.

He emphasised that organic growth remains the “primary growth engine,” driven by expanding the firm’s offerings in key areas.

“Whether that’s through market share, expansion of our life and health offering, renewable, casualty or cyber, there’s a lot of organic growth that we’re trying to achieve in the region,” O’Brien said.

A critical component of this organic push is assembling elite client teams.

“We are trying to put together the best client teams that we can,” he explained. “Part of the reason for the sort of high profile hiring that we’ve done is in order to achieve that. We want to be the go-to broker for everybody in the region.”

“Organic growth will only get us somewhere, so we’re looking to see if we can embed in some complementary businesses around the region and that’s where the M&A comes in.”

Earlier this year, Gallagher Re bought Australian broker Steadfast Re and acquired a Chinese licence through an acquisition. It also reached an agreement to take 100% control of the Japan P&C cedent facultative portfolio from JV partner Miller.

“I think over the next five years you’ll probably see more activity by Gallagher Re on the M&A side,” O’Brien projected.

The growth strategy will be tailored to the diverse markets within the region.

While he noted that “Gallagher Re is very strong” in Southeast Asia, with a goal to “consolidate and grow,” he described China as a market where the company is “just getting started”.

“We’ve got a fabulous portfolio business, an incredible team. We’ve got our platform ready and we’re going to grow that market,” he said of its Chinese operations.

Looking at other key territories, O’Brien identified significant potential for expansion.

“If you then think [of] some of the other larger markets, Korea, India, Thailand… our footprint isn’t quite as large as we’d like it to be.”

He named India and Thailand as prime targets for investment.

“India, Thailand are great examples of where we’re going to be looking to invest and grow our portfolio business,” O’Brien said, clarifying that this expansion would be achieved “through acquisitions of people and companies.”

“Gallagher is a growth organisation, and Gallagher Re has been tasked with growing that market share.”

The post Gallagher Re plans strategic M&A to solidify APAC market position appeared first on InsuranceAsia News.

“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.”

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.

The post Willingness from reinsurers to consider clients’ goals: Gallagher Re’s Mark O’Brien appeared first on InsuranceAsia News.

The post Gallagher Re launches cyber reinsurance framework to bridge Asia Pacific capacity gap appeared first on InsuranceAsia News.

The post APAC reinsurance market has ‘turned a corner’: Gallagher Re appeared first on InsuranceAsia News.

The post Gallagher Re appoints Jennifer Wen as executive director in Taiwan appeared first on InsuranceAsia News.