Beyond headwinds: Building durable growth in APAC insurance

KEY TAKEAWAYS

• APAC insurers are positioned for double-digit growth in 2026, with Life insurers’ New-Business Value (NBV) projected to rise by 15-20% and total capital returns (4.8%) consistently outpacing equity benchmarks.
• To combat rising per-claim costs—driven by New Energy Vehicles (NEVs) and frequent “secondary” natural catastrophes like floods—insurers must shift toward “liability-aware” portfolios that utilize sophisticated hedging for interest rate and FX volatility.
• Success depends on breaking down operational silos. Leveraging integrated data platforms (like Bloomberg’s MARS, AIM, and PORT) is essential for navigating the “triple threat” of geopolitical tension, complex regulatory shifts (IFRS 17), and climate risk.

Insurance companies across Asia Pacific (APAC) are primed for robust growth, aided by healthy margins and steady growth in premiums and volumes. These were the key forecasts of Bloomberg Intelligence’s mid-year outlook report, 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 have grown by an average of 15% in 2025, with NBVs of Chinese insurers expected to rise to nearly 20% as their margins improve. This outlook is supported by strong demand in key markets like Hong Kong, mainland China, Singapore and Thailand, benefiting major players like AIA and Prudential.

Additionally, this growth is complemented by Asian insurers’ total capital return of about 4.8%, which outpaces equity benchmarks and risk-free rates, and indications of share buybacks worth $7.5 billion over the next six months to one year. The region’s P&C insurers tracked by Bloomberg Intelligence gained 23% in the first half of 2025, outpacing the MSCI Asia Pacific Index’s 10% 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.

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.

Geopolitics

Insurers’ investment outcomes, while generally strong, must brace for turbulence from geopolitical tensions and trade tariffs, which are pushing up bond yields and forex-related costs, especially for firms in markets like Japan and Taiwan.

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 (IR) and foreign exchange (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 mid-year 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 claims caused by “secondary perils”, such as floods and heat waves, offset the lack of outsized claims from typhoons and earthquakes.

These could lower underwriting margins in the short term, following some major typhoons and floods in July and August 2025, while escalating credit risk among businesses exposed to NatCat losses. 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 so 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 for double-digit growth 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. 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.