Loss-free Greater China property reinsurance rates down low double digits

By Michael Jones

April 3 - (The Insurer) - Stable reinsurance demand and increasing availability and deployment of capacity have led rates in the Greater China region to trend down in 2025, Aon said in its April 1 renewals report on Tuesday.

April 1 renewals in Greater China, a term Aon uses to group China, Hong Kong and Taiwan, built on the favourable reinsurance market conditions observed at the start of 2025.

Aon said increased capacity relative to the prior year meant there was fierce competition for business among reinsurers, particularly in casualty but also for property catastrophe.

Property risks priced down by low double digits at January 1 amid healthy competition, while increases for loss-affected programs were generally limited.

In China, Aon said reinsurance demand is stable as insurers are content with current limits given the country's low inflation rates. However, underlying demand has tempered with the slowdown of the Chinese economy, with the insurance market expect to generate single-digit premium growth in 2025.

Terms and conditions were largely unchanged at renewals, Aon said. Limits and deductibles were stable, although a small number considered higher limits or buy-down options.

"We expect conditions in Greater China will continue to move in clients’ favour through 2025. However, property catastrophe reinsurance markets will be mindful of the catastrophe losses already impacting the market at the start of 2025," Aon said.

The broker said that the January earthquake in Taiwan, while minor, comes as the market counts the costs of the devastating California wildfires. As a result, it said reinsurers with Taiwanese exposures will keep an eye on profitability at future renewals.

Insurers in the region are also showing greater interest in alternative solutions including parametric, catastrophe bonds and sidecars. Aon said that low insurance penetration and significant natural catastrophe exposures in Greater China present a large long-term growth opportunity for the ILS market.