Swiss Re’s Kuk: Reinsurance demand rising across Asia as clients de-risk peak perils

Clients across Asia are looking to purchase more reinsurance to de-risk their peak perils, according to Swiss Re’s Victor Kuk.

Kuk, who heads P&C reinsurance for Southeast Asia, India, Korea, Hong Kong and Taiwan, told The Insurer demand for property reinsurance was rising in areas with increased natural catastrophe risk.

“This is mainly driven by property values, urbanisation and repair costs that are rising due to inflation,” he said.

“The protection gap also remains a major concern, while economic and infrastructure development, rising middle-class affluence and increased urbanisation have led to rapid risk accumulation of assets.”

He said specialty market conditions continue to be dynamic, with growth opportunities in areas such as engineering, driven by the positive outlook for construction and the green energy transition, and cyber, in view of rising awareness of the frequency and sophistication of cyber attacks.

Kuk said demand for cyber protection will likely continue to increase.

“We see demand for cyber driven by increased awareness of both the frequency and sophistication of cyber attacks.

“Globally, the cyber insurance market represents 2 percent of the commercial P&C market and this number will continue to grow. Swiss Re's forecast for cyber insurance market premium in 2024 is $15.5bn.

“Credit and surety also stand out as a stabiliser for global trade, especially with heightened geopolitical risks, supply chain challenges and increasing non-payment risks. Demand for EV insurance has also been increasing and this is a trend that we expect will continue,” he said.

“Overall, we see that demand in the region is up. Clients are looking to purchase more reinsurance to de-risk their peak perils, and we continue to provide capacity to serve market needs.”

Kuk said it remains too early to predict the likely outcome of the 1.1 renewals. “It's early days and a lot can change, particularly with the peak nat cat season, global economic uncertainty and political instability.

“The risk landscape is evolving, and the entire insurance industry value chain must manage these risks with commensurate rates and structures.”