Reinsurers willing to deploy additional capacity at Asia April 1 renewals: Aon

Aon, a global risk management and professional services firm, has released its 2025 April Reinsurance Market Dynamics Report, detailing favourable conditions for buyers during the April 1 renewals, a period heavily focused on Asia and particularly Japan.

According to Aon, reinsurers displayed a strong willingness to deploy additional capacity at this critical renewal date, with a significant uptick in available coverage across the Asia Pacific region.

This positive market outlook was largely driven by improving results and a relatively stable natural catastrophe environment, ensuring broad support for insurers and an overall favorable renewal process.

As a key renewal period for the region, April 1 saw 60 percent of Asia Pacific’s treaty business renewing, with Japan reaching as high as 95 percent.

Aon’s analysis indicates that the demand for reinsurance capacity remains high, and reinsurers continue to view the Asia Pacific market as a critical area for growth and diversification. Despite the Los Angeles wildfires in January, which provided a backdrop for negotiations, Aon’s report shows that these events had minimal impact on the capacity, pricing, or terms for the region’s renewals.

Aon also highlighted the growth in facultative capacity, particularly with the launch of their new Marlin APAC facility, which offers up to $15 million of dedicated capacity per risk for property and renewable energy sectors.

With reinsurers increasingly willing to deploy additional capacity and competition intensifying, insurers were able to negotiate favourable terms, especially in markets like Japan and South Korea.

Aon noted that risk-adjusted rate reductions in the mid-to-high single digits were typical, with double-digit reductions available in some territories. Insurers were also able to leverage the market’s appetite for property catastrophe business to achieve improved terms, even in previously challenging areas like U.S. casualty and property per-risk covers.

George Attard, CEO APAC for Reinsurance Solutions at Aon, said: “At April 1 our clients continued to benefit from favorable reinsurance market and pricing conditions, supported by Aon’s extensive advocacy, analytical and transactional expertise. We expect to see opportunities for insurers to explore frequency protections and top-up covers as we approach the mid-year renewals, especially for those insurers that concentrate on the key characteristics of high performance.”

“Across the board, facultative capacity has increased and reinsurers are competing more aggressively, creating greater opportunities for insurers to use facultative reinsurance to support growth plans and manage volatility,” added Attard.

Looking ahead, Aon anticipates that buyer-friendly conditions will continue, supported by strong demand and growing capacity.

As further renewals take place in Greater China, Australia, and New Zealand, the re/insurance broker expects to see similar positive outcomes.

Early 2025 saw the Australian states of Queensland and New South Wales impacted by Tropical Cyclone Alfred, but Aon reported that the impact on the market was limited, with the newly introduced Cyclone Reinsurance Pool (CRP) absorbing most of the insured losses.

In the facultative market, Aon observed that insurers are increasingly using their facultative reinsurance strategically, with an emphasis on optimising portfolios and supporting regional growth opportunities.

The growing capacity and competitive nature of the facultative market, alongside Aon’s data-driven insights, is helping insurers meet their capital management and risk transfer needs more effectively, says the firm.

Regional variations remain in the facultative market, with South Korea experiencing intense competition for large property risks, while Japan remains stable with a long-term view from insurers and reinsurers. Taiwan has seen a more cautious approach following recent performance concerns, and regulatory changes in India have posed challenges for cross-border reinsurance support.

Aon’s report indicates a positive and growing outlook for the Asia Pacific reinsurance market, driven by increasing capacity, strong competition, and favourable pricing conditions. These factors are creating opportunities for insurers to manage risk effectively, grow their portfolios, and take advantage of a dynamic and evolving market.

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