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FOR IMMEDIATE RELEASE
SINGAPORE - OCTOBER 25, 2018 10:23 AM (EDT)
Government intervention and regulatory support can influence the development of insurance and reinsurance markets, but the actual impact varies across markets in Asia.
A Best’s Special Report, titled, “Impact of Government and Regulatory Support for Local Reinsurers Varies in Asian Markets,” states that the desire to support social stability with a greater level of fiscal certainty is one key motivation for using reinsurance as a policy tool. However, the impact of government initiatives can vary significantly by country and over time.
Where government intervention does accelerate premium growth, it needs to be matched by strengthened enterprise risk management capabilities; otherwise, there could be a higher risk of earnings and capital volatility. Initiatives that favor cessions to local reinsurers, do not address line of business or geographic concentration risk issues those reinsurers face. Especially in smaller, catastrophe-exposed markets, it could increase the risk of reinsurers coming under stress from the same events as their cedants.
To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=279240 .
A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry.