A bright future for a flourishing APAC

Rob Saville, TransRe’s president of Asia Pacific, outlines where he sees the reinsurance opportunities and risks in this fast-growing region.

What opportunities do you see in Asia Pacific?

Our region already accounts for more than half of the world’s trade, GDP and population. The International Monetary Fund and World Bank expect us to lead the world’s GDP growth and create the region’s largest ever middle class, who will live in cities that will require additional infrastructure, the construction of which will require bespoke solutions.

Additionally, Southeast Asia’s energy demand will be larger than the EU’s by 2050, according to the International Energy Agency – but the current set-up needs to change. Our dependence on imported fossil fuels has burdened households and businesses and has stressed public finances with high prices since 2022.

Energy security and the transition to a carbonless energy future mean big investment in solar, wind, batteries and low-emissions fuels, as well as electric vehicles and interconnected grids.

For us, this means facultative growth opportunities in construction, engineering and surety, as complex, high-tech risks and large infrastructure projects come online.

What are the major challenges?

Our region is regularly impacted by severe natural catastrophes that hit vulnerable communities and businesses operating in economies at an early stage of development that have significant protection gaps. Even developed economies have significant assets to protect.

During soft market cycles, deals are often absorbed by treaties that would have been better written facultatively, protecting domestic insurers’ relationships. When shock losses occur and treaty capacity dries up, regional insurers face difficulties.

By being open to offshore reinsurance support, countries can bring additional capacity and capabilities to help develop and support their local market, while protecting investment in economic activity.

What do you anticipate will happen during upcoming renewals?

Clients who provide accurate, immediately available data and show a desire to work to meet the above challenges will earn better rates and pricing. We trade with traders, but we partner with partners. We seek long-term relationships, based on mutual trust and a shared understanding of the price of risk.

What are your top property discussion points?

Data quality affects all parts of the (re)insurance value chain, from modelling, underwriting and pricing to claims and risk management. Economies are developing quickly, and the risk landscape is rapidly changing. Today, every country has considerable assets. Accurately tracking them with superior quality data is an industry goal, especially given the level of foreign direct investment here as businesses expand internationally.

Contingent business interruption is a key topic, even if losses have so far been potential not actual, and we are monitoring developments closely around renewable energy exposures losses.

We will also be discussing catastrophe attachment points, political risk, inflation and insured values.

Any key casualty themes?

We recently highlighted the challenges facing the US casualty/liability market, which also inform our global perspective. These included the rise of third-party litigation funding; the problem of auto/motor exposures embedded in excess/umbrella programs; the increase in frequency and severity of verdicts/settlements; and the need to maintain significant rate increases to get ahead of trend, as well as tightening limit levels and monitoring limit utilisation.

Any regulatory developments?

We see increasing pressure for artificial intelligence oversight. The development and application of AI has significant implications for privacy, data protection as well as underwriting. How we manage that development will continue to dominate debate.

What’s your message for TransRe’s Asia Pacific clients and brokers?

We will overcome challenges and seize opportunities collaboratively. We aim to grow our core partnerships and will support multiple lines to do so. In return, we ask our clients to support us, because early full signings of significant lines help maintain our alignment of interests throughout the cycle.