Beyond headwinds: Building durable growth in APAC insurance

KEY TAKEAWAYS

• APAC insurers are poised for a strong 2026, with Life insurers expected to see double-digit growth (10%+) in New-Business Value (NBV)—particularly in China, Hong Kong, and Singapore—while Property & Casualty (P&C) firms benefit from healthy underwriting margins and investment returns.
• Insurers face a “tightrope act” managing external volatility, including rising geopolitical tensions and climate-driven natural disasters. P&C firms must become “liability aware” to combat rising per-claim costs—driven by factors like New Energy Vehicle (NEV) repairs—by optimizing portfolios and perfecting interest rate and FX hedging.
• Success depends on breaking down internal silos and adopting integrated, data-driven solutions. Leveraging tools like Bloomberg’s MARS and AIM allows firms to unify front-to-back office operations, ensuring they can navigate complex regulatory burdens like IFRS 17 while maintaining scalable growth.

Insurance companies across Asia Pacific (APAC) are primed for robust growth in 2026, aided by healthy margins and steady growth in premiums and volumes. These were the key forecasts of Bloomberg Intelligence’s 2026 outlook, which also pointed to areas of attention for APAC insurers if they are to remain competitive.

On the life insurance side, APAC insurers’ new-business value (NBV) is likely to rise by double digits while the sector’s total capital return is set to outpace equity benchmarks. Property & Casualty (P&C) firms too are seen growing their premiums, led by healthy underwriting margins and investment returns at companies in Australia, Japan and China.

The outlook for life insurers is particularly strong, with NBV projected to grow by 10% or more on average in 2026, moderating from a high 2025 base. NBVs of Chinese insurers are expected to rise around 20% on margin expansion as insurers continue to shift away from guaranteed products toward participating and protection-focused policies. This outlook is supported by strong demand in key markets like Hong Kong, mainland China and Singapore, benefiting major players like AIA and Prudential.

Additionally, this growth is complemented by Asian insurers’ total capital return of about 5.3%, which outpaces equity benchmarks and risk-free rates, and indications of share buybacks worth $6.5 billion over the next six months to one year. The region’s P&C insurers tracked by Bloomberg Intelligence showed full-year 2025 performance of 28% leading into 2026, outpacing the MSCI Asia Pacific Index’s 22% gain.

Growth in the shadow of market volatility

This optimistic forecast, however, is complicated by APAC’s complex and rapidly evolving business environment that presents insurance firms with a dual challenge: navigating external market shocks while managing internal operational, compliance and scalability hurdles in a period of heightened market and regulatory uncertainty.

Success in 2026 and beyond will therefore depend not just on capturing opportunities in Asian and Pacific markets, but on skilfully balancing these competing pressures. Key to overcoming these risks will be smart, joined-up systems and information, enabling insurers to respond more effectively to market volatility, regulatory change and shifting risk exposures.

Geopolitics

Insurers’ investment outcomes, while generally strong, must brace for turbulence from geopolitical tensions and trade frictions that are shaping bond markets across the region. Higher government bond yields — including rising Japanese government bond (JGB) yields — are prompting insurers to extend duration gradually to better manage asset-liability mismatches. These dynamics are encouraging a more measured, medium-term investment approach, as insurers adapt portfolio positioning to a more complex and uncertain global environment.

Modelling these risks accurately can be highly challenging without keeping on top of the latest news and data. This is where Bloomberg comes in, with a suite of tools directly addressing the challenges faced by insurers in APAC.

Its Multi-Asset Risk System (MARS) provides a comprehensive Asset-Liability Management (ALM) solution, which allows for full balance-sheet stress testing and cash-flow modeling and analytics to manage duration gaps. For the front office, PORT, Bloomberg’s flagship application for portfolio analysis, includes a trade simulation function that allows you to test your portfolio against geopolitical shocks.

Meanwhile, Bloomberg’s Asset and Investment Manager (AIM) provides a comprehensive, end-to-end solution for managing a global, multi-asset investment portfolio, streamlining everything from portfolio management and trading to compliance and operations.

Becoming “liability aware”

Rapid changes in the operating environment can produce equally rapid changes in the liability picture. To take one example, the rapid shift to new energy vehicles (NEVs) in some key Asian markets is a factor behind rising per-claim costs from vehicle and property damages.

P&C insurers are raising prices to protect their margins, but addressing this margin pressure also requires insurers to identify and de-construct the sources of excess returns on the portfolio side, to drive further optimization and develop resilient asset portfolios that are “liability aware”.

This challenge is magnified in APAC by the region’s scarcity of long-duration assets, which forces insurers to invest in USD and EUR-denominated assets. Interest rate and FX hedging therefore becomes critical, as do tools that can help insurers perfect their hedging abilities. Bloomberg’s MARS assists with IR risks with its powerful scenario-modelling functionality, while AIM provides FX overlays and PORT assists with FX hedged benchmarking. In addition, Bloomberg supports all these elements with cash monitoring, portfolio and ALM monitoring and execution solutions.

Bloomberg’s 2026 outlook notes how efficiency gains have successfully eased margin pressure in some areas, for example the higher repair costs of NEVs; CPIC, for instance, saw margin gains from optimizing its NEV business model.

But to be valuable, this knowledge cannot be held in siloes. Bloomberg’s Research Management Solutions (RMS) suite helps investment teams capture and centralize proprietary research, enabling faster, more informed decisions to support portfolio growth, helping life insurers attain healthy NBVs and P&C firms manage claims inflation.

Natural catastrophes

Insurers are preparing for higher natural-disaster claims to account for their growing frequency, even as secondary perils such as floods and heatwaves continue to dominate loss activity and aggregate insured losses are tracking below long-term averages, reflecting the absence of outsized losses from major typhoons and earthquakes in some markets.

These could lower underwriting margins in the short term, while escalating credit risk among businesses exposed to NatCat losses. In China, economic losses from natural disasters have averaged around 0.34% of GDP over the past decade, underscoring relatively contained macroeconomic impact to date but also highlighting rising volatility risk as climate patterns become more unpredictable. The MARS Climate Risk module can be used to test asset portfolios for their resilience to climate-related risks, which are often complex and multidimensional. In addition, the MARS Credit Risk module helps insurers “identify, assess, monitor and manage credit risk” while PORT’s Scenario Analysis allows portfolios to be tested against historical natural catastrophes.

Compliance burden

The regulatory landscape is becoming increasingly complex — especially in APAC, a region with a diversity of markets. For instance, the implementation of new accounting standards like IFRS 17 has fundamentally changed how insurers measure and report their contract liabilities. This, combined with a growing global focus on ESG disclosures and climate-risk reporting, places a significant burden on compliance departments, diverting resources that could otherwise be used for innovation and growth.

AIM is designed with compliance monitoring in mind, using Bloomberg’s wealth of current information to power constant regulatory surveillance. Meanwhile the MARS XVA and Hedge Accounting modules enable insurers to precisely manage and report on the valuation adjustments from currency and interest rate volatility, which is crucial for controlling high forex related costs and complying with regulatory standards like IFRS 17 and LDTI.

Conclusion: A tightrope act

The outlook for APAC insurers is one of clear opportunities, with prospects for continued premium growth, resilient margins and double-digit NBV expansion tempered by a challenging and unforgiving risk environment.

While external risks, such as geopolitical tensions, inflation, a dynamic regulatory landscape and climate change, are largely beyond the control of insurance firms, they can better manage these risks and equip their operations for future growth by embracing tech and data-driven solutions that can ensure systems are compliant yet imminently scalable.

Bloomberg’s investment management solutions offer an integrated framework tailored to support the core functions of insurance firms and help them capitalize on the opportunities and navigate the challenges presented in 2026 and beyond. The idea is to break down silos and unify the front-, middle- and back-offices to ensure that sales, investment and risk teams are all operating on the same assumptions and knowledge.

By combining AIM for portfolio execution, MARS for specialized risk and ALM, and RMS for informed decision support, insurance firms in APAC can avail of a single, efficient system that helps improve operational efficiency, strengthen risk controls, enhance investment decision-making, and match or exceed growth forecasts.