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Asia reinsurance rates soften in 2026 amid abundant capacity
AM Best said cedents largely kept deductibles steady while using premium savings to buy higher-layer limits and shift toward buy-downs and frequency protection structures.
Asia’s reinsurance market saw abundant capacity during the 2026 renewal season, a mix that AM Best said contributed to sliding rates and over-placement. In its AsiaFocus: Resilience Through Transformation report, the ratings firm said underwriting discipline stayed resilient even as pricing faced downward pressure.
AM Best reported that cedents largely maintained stable deductibles and redeployed ceded premium savings to purchase higher-layer limits, while also supporting emerging lines as risk appetite grows. The firm added that competitive pressure is expected to continue into 2027, with rate softening likely to persist on clean accounts.
To respond to the pricing environment, the report said buyers are increasingly using buy-downs and frequency protection structures. AM Best also flagged potential weather-related headwinds, including an expected Super El Niño and severe weather such as droughts, heatwaves, severe typhoons, and flooding, citing Typhoon Bavi in July 2026 as an example.
Regionally, AM Best pointed to Japan’s April 2026 renewal, where property XOL saw another year of double-digit rate reductions, and property proportional treaties benefited from improved terms, including ceded commission increases of up to five percentage points. Looking ahead, it said Japanese cedents are better placed to manage the cycle but are unlikely to raise retention further in this soft market, while China is driving demand growth tied to economic expansion and emerging sectors including green energy, electric vehicle supply chains, data centres, and cyber risks.