MALAYSIAN RE’S ASEAN INSURANCE PULSE 2025 HIGHLIGHTS LOW PREMIUM RETENTION, CAPACITY GAPS

KUALA LUMPUR, Dec 18 (Bernama) -- Malaysian Reinsurance Bhd (Malaysian Re) has released the ninth edition of its annual research publication, ASEAN Insurance Pulse 2025.

The report examines the premium retention capacity and capabilities of ASEAN insurance markets, which could help strengthen the region's ability to underwrite and retain more risk.

In a statement today, Malaysian Re's president and chief executive officer Ahmad Noor Azhari Abdul Manaf said that rising incomes, digitisation, infrastructure investments and the growing impacts of climate change are driving stronger demand for risk protection across the region.

"That being said, penetration rates remain relatively low, even in the most mature re/insurance markets, and capacity and retention ratios are limited, particularly for large, complex and capital-intensive risks.

"Recognising this as a critical concern for insurers in the region, we have chosen to focus on this topic for ASEAN Insurance Pulse 2025, highlighting the key challenges limiting market development and outlining solutions to foster sustainable growth and enhance protection for communities across the region," he said.

Based on 15 structured interviews with senior executives from insurance and reinsurance companies in ASEAN, the report notes that although demand for protection against large and complex risks is rising, correlated risks, limited surplus capital and uneven technical capabilities continue to constrain insurers’ retention capacity, leading to insufficient domestic capacity in many markets.

"ASEAN Insurance Pulse 2025 further notes that access to advanced catastrophe modelling, high-quality data and actuarial skills remains uneven across ASEAN.

"In addition, the ability to strengthen retention and resilience is hindered by a range of formal and informal trade barriers that limit competition, reduce capacity and hinder innovation in local insurance markets," the statement said.

The report also observes that strengthening domestic and regional retention of strategic economic risks would require the establishment of regional insurance pools, more adaptable solvency frameworks and enhanced regional expertise, particularly in catastrophe modelling.

Ahmad Noor Azhari added that it is crucial to continue to build regional expertise and capacity to enhance the resilience of ASEAN's insurance industry and its role in supporting economic and social progress

"Achieving this requires collaboration among industry participants and public-sector stakeholders to develop shared capabilities, aligned frameworks and sustainable solutions," he said.

The ASEAN Insurance Pulse 2025 report is available for download at www.malaysian-re.com.my.