Asia
Fitch Retains Neutral Outlook on Asia-Pacific Insurance Sector
Fitch Ratings has kept a neutral outlook for the Asia-Pacific insurance sector, according to a recent release.Solid capital buffers, controlled underwriting, and improved asset-liability management mitigate market headwinds, modestly increasing claim inflation, and new regulatory solvency regimes, according to Fitch.Moderately higher claim costs, along with supply chain disruption from geopolitical tensions, have reduced nonlife underwriting margins in the region, Fitch said.Increasing health and motor losses pressure profitability in Korea and Indonesia, while home and motor repair costs show stickiness in Australia, the rating agency said.Rising interest rates, a better reinsurance environment, and prior-period pricing actions offset claim inflation, but late-cycle market and credit risk linger, Fitch said.Japanese insurers face higher capital requirements through a new economic value-based solvency regulation, while Indonesian counterparts are undergoing the first phase of higher minimum equity requirements, according to Fitch.Meanwhile, lingering structural issues led to a deteriorating outlook in China and Taiwan, the rating agency said.
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