2026 began with loud explosions. Not New Year fireworks, but word from Caracas: Venezuela’s President Nicolás Maduro was captured by US forces in a raid on 3 January and charged with drug trafficking and narco-terrorism. Oil prices soon swung, as markets weighed what his capture could mean for Venezuela’s huge oil stores and for stability in world supply.
While the development, on the surface, doesn’t directly relate to Asia-Pacific insurance, it sets a tone: continuing the uncertain geopolitical and macroeconomic backdrop that defined 2025 and hinting at the potential for even more volatility in 2026.
The Maduro situation occurs amid wider global uncertainty and discontent. Data from the Armed Conflict Location and Event Data project show that demonstration events and political violence events continue to rise, with APAC leading in demonstrations. Globally, insured losses from civil unrest continue to grow.
In APAC, the riots in Nepal and New Caledonia ranked among the costliest globally over the last two years. Swiss Re data show that globally, losses from strikes, riots, and civil commotion continue to rise rapidly.
The situation is likely to recede in 2026. Emerging government protests in Iran underscore the risks the region may face.
As a result, political violence insurers will be on alert as the year begins. Not just because of the potential for new events, but because market capacity for these risks continues to grow, yet losses keep climbing. “This is not usually how the insurance cycle works,” points out Dipam Pandit, head of war and terrorism for APAC at Liberty Specialty Markets. “If you have lots of losses, capacity tends to come down and pricing goes up.”
Global disruption is, of course, not exclusive to geopolitics. One example from 2025 is the “Liberation Day” tariffs, introduced by U.S. President Trump on 2 April, which compounded volatility and tightened supply chains across regional hubs. Throughout the year, Trump introduced new tariffs, then eased them, then raised them again.
In the marine sector, this, alongside inflation, has added to uncertainty while inflating declared shipment values and replacement costs. The U.S. is likely to wield tariffs throughout 2026 as a blunt negotiating tool to extract concessions from trade partners. Despite this volatility, industry observers expect marine pricing to remain soft, extending rate pressure well into this year and through 2027, eroding insurer margins amid unexpected shocks.
“Looking at past cycles, which have typically lasted five to seven years, the current soft phase is unlikely to reverse quickly,” says Julia Joes, head of marine for Asia at Berkshire Hathaway Speciality Insurance.
Looking more broadly at the region at large, insurance premiums will continue to climb in 2026. Advanced APAC non-life premiums are expected to edge up to 2.5% in 2026-27, while emerging markets, excluding China, are projected to see non-life growth from 3.9% to 4.0%, estimates Swiss Re.
The 1/1 reinsurance renewals across APAC proved once again to be buyer-friendly. Cedants secured broad rate cuts and improved terms as reinsurers competed to place record capital. Even loss-hit markets like Taiwan and Indonesia saw steep reductions, while Southeast Asia saw some of the sharpest declines in the region, reflecting intense competition for market share.
AI, cyber, data centres, tech
Artificial intelligence (AI) also faces a pivotal year. Hype around the tech has sent stock valuations sky-high. But many suggest that the market boom may be the biggest bubble in history. 2026 will likely reveal whether that exuberance is justified or not, and, just as importantly, to what degree.
For insurers, AI will cut both ways in the year ahead. On the liability front, silent AI risk is climbing. Social media addiction is also sharpening as platforms add AI features such as chatbots. This could open up insurers to claims alleging mental health harm or even physical injury linked to AI-enabled interactions. 2026 is another year in which insurers try to beat a path that mitigates against AI risks, for both themselves and their policyholders.
Turning to broader cyber exposure, cyber has again remained the top future business concern for APAC businesses. However, despite increased appetite and losses, rates have continued to soften, as Marsh data, below, shows. Moody’s expects premium growth to stay in the single digits in the coming years, with broader coverage and continued price cuts likely to compress margins further. Beazley in November announced that it was pulling back from the cyber market amid rising claims and falling prices.
Nonetheless, (re)insurers, from within the region — and outside of — will look to continue to build their cyber books in Asia-Pacific.
Small and medium-sized enterprises (SMEs) are seen as a key growth opportunity for the market. But the balance between affordable offerings and profitability is difficult to strike.
“The reality is that [SMEs] have vastly different risk profiles from multinationals and require tailored solutions that address the nuances of their cyber exposure,“ says Alexandra Wrobel, head of cyber, commercial insurance Asia at Zurich. 2026 won’t be the year the puzzle is solved, but the industry will look to make progress.
Looking at AI on the operations side, insurers are embedding GenAI and automation more deeply into claims, underwriting, and distribution. In December, Munich Re announced it is targeting €600m (approx. US$703m) in annual cost savings by 2030, largely driven by AI-driven efficiencies. Life insurers such as Manulife in Singapore and Prudential in Hong Kong are forming AI centres of excellence.
Chubb is making a big bet on the technology, late last year saying it could reduce its headcount by 20% in the coming years as a result of the automation of core functions. The year ahead isn’t a question about whether insurers will keep testing and rolling out the tech — only how hard and how fast.
And powering all of this AI growth is another rapidly growing opportunity for insurers: data centres, the facilities house the servers and chips that run AI systems. Asia-Pacific — in particular, Malaysia, Thailand, Japan, and Australia — is seeing a surge in new builds to meet soaring demand. In 2026 alone, the demand for data centres could generate more than US$10bn in new premium volume, according to Aon.
There are also other major technology shifts that will keep insurers thinking in the year ahead.
In China’s low-altitude economy, insurers had already expanded beyond stand-alone drone products toward packaged covers that blend hull and third-party liability with tailored add-ons such as product liability and cyber. With China’s revised Civil Aviation Law due to take effect in July 2026, the operating environment for unmanned aircraft is expected to tighten further, sharpening risk selection and policy wording.
Amid a surge in the growth of humanoid robots, China is also rolling out robot liability products. Insurers globally will take an interest in the path insurers are treading in the country.
Self-driving vehicles will see more test-to-live trials in a handful of early markets, including in Asia. Singapore stands out as one of the region’s more forward-thinking hubs for insurance, with driverless shuttles set to begin operating on public roads from late 2025, and insurers backing pilot deployments.
Electric vehicle sales will also continue their march in 2026 and, alongside that, insurers will work hard in many regional markets to try to curtail underwriting losses.
Life and health
Meanwhile, life and health insurers head into 2026 facing climbing costs and the potential for new underwriting assumptions.
Soaring medical inflation will continue to test insurers and policyholders in 2026, with many regions expected to be in the double digits.
Insurers will continue to look for ways to innovate to mitigate the impact of rising costs. In Hong Kong, insurers will continue to develop partnerships with hospitals in Mainland China, where care is cheaper than in the special administrative region. Employee benefits providers will hope that solutions such as stop loss products, which have become popular in the United States, will gain traction in APAC.
GLP-1 drugs — given as injections to treat diabetes and obesity — will see more pill forms arrive in 2026, making them easier to take and likely to boost uptake, even as access remains patchy across the region.
GLP-1, however, presents insurers with an emerging challenge: these drugs let applicants mask years of metabolic strain with quick weight loss, then regain it when they stop, driving anti-selection as healthier policyholders ditch policies for better rates. The age of body mass index as a reliable and core measure will be tested in 2026, with insurers likely relying more on BMI history and other measures moving forward.
The use of asset-intensive reinsurance (AIR) by life insurers also shows no signs of slowing, as carriers hunt for capital efficiency and steadier earnings. But supervisors will tighten their oversight of the space in 2026, wary of hidden risks that could surface when markets turn sour.
Regulation, capital to recalibrate
Asia-Pacific insurance will also be driven by regulatory opening, stronger conduct oversight and capital reform.
This includes India, which, after much speculation, has moved to open its insurance sector after Parliament passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) bill to lift the FDI cap to 100%. For international insurers, the ability to fully own a company could ease operational constraints and support profitability. Many, however, are still likely to see the benefits of maintaining local partnerships to protect distribution reach and preserve market knowledge. Eyes will be on how this segment of the market moves in 2026.
The Sabka Bima Sabki Raksha bill also expands the Insurance Regulatory and Development Authority of India’s (IRDAI) enforcement powers. The IRDAI is moving quickly, already looking to impose binding commission caps for agents and intermediaries.
Indonesia’s first tranche of new capital rules will also kick in at year-end 2026, with the second phase to follow in 2027.
“This will be a significant global minimum capital requirement event,” notes Justin Ward, head of capital advisory for APAC at Guy Carpenter. Japan’s new economic-value-based solvency regime, due to take effect by fiscal year 2026, is expected to push more life insurers toward funded structures to reduce interest-rate sensitivity and smooth capital volatility.
The new and changing capital rules in the region are expected to boost demand for structured solutions in 2026, as carriers seek cheaper ways to free up capital without diluting shareholder stakes or taking on costly debt.
And amid industry developments, the macro floor has shifted as well. Economists now expect inflation to stay structurally higher than before the pandemic, with 2% acting more as a floor than a ceiling in most major economies, and price levels likely hovering near 3% through mid-2026. That environment complicates underwriting and capital planning, tightening the leeway insurers once had to absorb shocks.
All in all, 2026 will test whether Asia-Pacific insurers can turn the year’s mounting headwinds — geopolitical chaos, AI developments, softer prices, and new capital rules — into tailwinds for growth. One thing is certain: risk won’t sit still.
