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Endowed with an enabling environment, reinsurers in the Asia-Pacific region posted solid performances in 2023. This market is led by China Re, which, according to IFRS 17 standards, generated reinsurance revenue of 7.789 billion USD in 2023.
All reinsurers in the region are benefiting from a market that has been growing steadily since 2014, rising from 23.792 billion USD in 2014 to 32.395 billion USD by the end of 2023.
It is noteworthy that the restatement of turnover in accordance with IFRS 17 has led to a sharp drop in premium income for 2022 in the Asia-Pacific region, and consequently for certain reinsurers such as China Re, whose premium volume fell from 19 billion USD in 2021 according to IFRS 4 to 7.135 billion USD in 2022 under IFRS 17.
Following the introduction of the new IFRS 17 standards in 2022, the market has shown a slight decline in 2023, adopting a cautious development strategy based on:
- ongoing capacity adjustments,
- stable pricing conditions,
- selective risk underwriting,
- enhanced portfolio management.
Asia-Pacific reinsurance market: evolution of key indicators 2014-2023
Figures in millions USD
| 2014 | 2018 | 2021 | 2022 | 2023 | 2014-2023 evolution (1) | |
|---|---|---|---|---|---|---|
| Turnover | 23 792 | 38 623 | 50 579 | 33 496 | 32 395 | 3.49% |
| Global market share | 11% | 14% | 13% | 9% | 9% | -3.21% |
| Share capital | 25 149 | 24 011 | 26 442 | 24 526 | 25 136 | -0.01% |
| Shareholder’s equity | 61 908 | 80 110 | 100 809 | 96 367 | 103 320 | 5.86% |
| Net result | 6 301 | 5 938 | 9 252 | 8 040 | 10 539 | 5.88% |
| ROE | 10.20% | 7.40% | 9.20% | 8.30% | 10.20% | 0% |
| Loss ratio | ND | 70.30% | 74.60% | 75% | - | - |
| Combined ratio | ND | 100.40% | 101.20% | 100.30% | - | - |
| Combined ratio IFRS 17 | - | - | - | 94.50% | 91.60% | - |
(1) Average annual growth rate
Profitabilityof the Asia-Pacific reinsurance market
Good management of the risk portfolio, combined with a low level of natural catastrophe business, has enabled reinsurers in the Asia-Pacific region to report record profitability in 2023.
At the end of 2023, ROE for the zone as a whole reached the same level of 2014, that is 10.2%. In 2020, the post-Covid-19 year, ROE dips to 5.9%, its lowest level of the ten years under study.
As for the other indicators, net result also rose sharply in 2023, going from 8.040 billion USD in 2022 to 10.539 billion USD, an increase of 31.1% in one year.
At the same time, shareholders' equity reached 1033.320 billion in 2023, compared with 96.367 billion USD in 2022, up 7.2% year-on-year.
Asia-Pacific reinsurance market: combined ratio
Based on the new IFRS 17 standards, the 2022 and 2023 combined ratios for 2022 and 2023 were set at 94.5% and 91.6% respectively, below 100% for the first time since 2018. Under the old standard, IFRS 4, all combined ratios from 2018 to 2022 were above 100%.
Remarkably, the combined ratio for 2022 under IFRS 4 was set at 100.3%, while its restatement under IFRS 17 brings it down to 94.5%.
Top 10 reinsurers in the Asia-Pacific region
The implementation of IFRS 17 has radically changed the concept of turnover for a large number of Asian reinsurers. The most significant example is China Re, the region's leading reinsurer, which lost more than double its turnover by switching from one accounting method to another.
Under the old calculation method, China Re's turnover in 2022 amounted to 18.510 billion USD (1). This same turnover figure, restated in accordance with IFRS 17, turns into insurance revenue of 7.135 billion USD (2).
In fact, after restatement of the figures and according to China Re's own balance sheets, the reinsurer's 2023 premium income rose by 9.17% in 2023, from 7.135 billion USD in 2022 to 7.789 billion USD twelve months later.
In 2023, the region's top ten reinsurers underwrote 92.77% of total Asia-Pacific premiums. China Re alone accounted for 24.04% of this amount. The Japanese MS&AD Ins. Group and India's GIC Re come second and third with market shares of 17.83% and 13.77% respectively.
(1) China Re Annual Report 2022, exchange rate as at 31/12/2022: 1 CNY = 0.14438 USD
(2) China Re Annual Report 2023, exchange rate as at 31/12/2023: 1 CNY = 0.14105 USD
