Fitch: Foreign Participants Eyeing Asia Reinsurance Market's Growth

Sun Aug 17, 2014 9:00pm EDT

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(The following statement was released by the rating agency) Link to Fitch Ratings' Report: Asian Reinsurance Markets - Softening Premium Rates With Greater Foreign Interest here SINGAPORE/HONG KONG, August 17 (Fitch) There is increasing interest among foreign reinsurers and other participants to set up or expand their operations in the Asia-Pacific region, Fitch Ratings says. The strong growth momentum of the Asian reinsurance markets is one of the attractions for foreign participants, along with increasing risk awareness and the continued market demand by the cedants, spurred by frequent occurrences of natural catastrophes in the region. In a special report published today, Fitch says premium rates for regional reinsurance policies renewed during 2014 have reached a plateau. The softening premium rates are largely attributable to a decrease in the frequency and severity of natural catastrophes in the region since 2011. An increase in reinsurance capacity in the form of new start-ups, as well as Asian operations set up by global reinsurers, are another factor that has contributed to the weaker premium rates. Several companies have taken advantage of the current situation to expand their reinsurance coverage at a lower cost. The report notes that the potential financial impact caused by natural catastrophes has led to a review of risk appetite and management strategy for both the insurers and reinsurers. Some of the insurers are on the lookout for alternative diversified sources of funding, to reduce their heavy dependence on reinsurers. During 1H14, several catastrophe bonds were issued in Japan. These bonds cover various catastrophe risks such as earthquake and typhoon risks. The report "Asian Reinsurance Markets: Softening Premium Rates with Greater Foreign Interests" is available at www.fitchratings.com, or by clicking on the link above. Contacts: Wan Siew Wai Senior Director +65 6796 7217 Fitch Ratings Singapore Pte Ltd. 6 Temasek Boulevard #35-05 Suntec Tower Four Singapore 038986 Jeffrey Liew Senior Director +852 2263 9939 Media Relations: Bindu Menon, Mumbai, Tel: +91 22 4000 1727, Email: bindu.menon@fitchratings.com; Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com; Leni Vu, Sydney, Tel: +61 2 8256 0326, Email: Leni.Vu@fitchratings.com; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Additional information is available on www.fitchratings.com. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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