As of the end of 2023, a significant 87% of rating units in the Asia Pacific (APAC) region maintained stable outlooks, underscoring the sector’s resilience amid challenging conditions.
According to a report from AM Best, mature markets within APAC have thrived due to stable economic conditions and robust risk management practices. In contrast, emerging markets, while exhibiting lower insurance penetration, are adapting by offering simpler insurance products that present a reduced risk of adverse claims development.
The report, titled “APAC Benchmarking: Positive Signs Whilst Navigating Climate and Geopolitical Uncertainty,” highlights that despite increased catastrophe activity, New Zealand and Singapore were at the forefront of positive outlook revisions in the insurance sector.
Throughout the year, AM Best upgraded eight Long-Term Issuer Credit Ratings (ICRs) while downgrading four, with the latter primarily attributed to declining Best’s Capital Adequacy Ratio (BCAR) scores and weakening operating results. Additionally, the agency introduced ten new ratings in the region.
Notably, over 75% of AM Best’s ratings in Asia-Pacific were classified with a Long-Term ICR of “a-” or higher, reflecting stronger performance among mature markets compared to their emerging counterparts. AM Best’s ratings encompass a diverse range of entities, including reinsurers, insurers, mutuals, captives, credit and health insurers, takaful operators, and protection and indemnity (P&I) clubs.
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