Asia-Pacific remains one of the world’s most promising regions for economic growth and innovation. As businesses pursue that opportunity, however, the region’s risk landscape is becoming more volatile, interconnected, and underinsured.
At Guy Carpenter’s CEO Forum 2026 in Hong Kong, a clear message emerged: the Asia-Pacific growth story remains strong, but risks are evolving faster than organisations are becoming resilient. For insurers and reinsurers, this creates urgency and opportunity. The challenge is not only to respond to individual threats, but also to help clients navigate a more complex environment, shaped by climate volatility, technological disruption, changing workforce expectations, and geopolitical fragmentation.
Themes shaping the region’s risks
Four themes shaping the risk environment in the region are capital, technology, people, and partnership. Jeremy Goodman, Chief Client Growth Officer at Guy Carpenter, discussed these key themes that are amplifying exposure and complicating losses across Asia’s markets:
- Capital: Economic and geopolitical tensions, as well as accelerating changes in the climate, are creating stress on organisations’ capital. Competing political interests are causing geopolitical fragmentation around the world.
- Technology: Advances in technology and the adoption of artificial intelligence will create winners and losers. The need to adapt and evolve with AI will accelerate.
- People: As the workforce’s composition evolves, changing expectations and mobility are reshaping talent recruitment and retention strategies. Demographic shifts across Asia are also affecting skills availability and workforce planning.
- Partnership: A significant protection gap and softening market conditions in the region create opportunities for businesses and the insurance industry to forge strong partnerships to solve risk challenges.
Economic and geopolitical tensions
Geopolitical and policy uncertainty are negative for markets, businesses and trade, noted Dr. Robert Xiao, Director of the Beijing Corporate Network of The Economist Enterprise. Historically, high levels of uncertainty, such as those seen in current global affairs, have been associated with recessions and spending downturns. Global growth will be shaped by tariffs and the conflict in Iran and its impact on oil prices, he explained.
A global GDP growth forecast of 2.7% for 2026 by the Economist Intelligence Unit would be the lowest since the COVID-19 pandemic. Meanwhile, the EIU estimates regional growth in Asia will average 3.8%, down from 4.2% in 2025. Geopolitical tensions between China and the US will continue to complicate the operating environment in the region, leading to growth that is more widely, but thinly, spread.
Slower growth is a complex challenge for businesses and the insurance industry, where growth is required to enable future investment. At the same time, however, geopolitical uncertainty increases risks and the need for risk transfer solutions. It may also reduce investors’ appetites.
Opportunities and threats outlook
Oliver Wyman surveyed more than 250 CEOs in Asia, Europe, and North America, and conducted roundtables with executives in major markets across Asia, to produce an Asia 2030 outlook. Ben Simpfendorfer, Partner at Oliver Wyman, presented the research findings at the forum.
CEOs were asked to name the top three factors they see as a business opportunity and/or threat. The top opportunities cited included competitive disruption, cited by 65% of CEOs, and talent and workforce by 50%. The top threats included macroeconomic conditions, cited by 57% and geopolitics by 41%. Oliver Wyman’s research found Asia-based CEOs consider long-term business reinvention and transformation as a top priority.
A serious threat in the Asia-Pacific region is its significant protection gap, with about 90% of losses uninsured. Globally, uninsured losses are approximately 50%. This is an important opportunity for the insurance industry to communicate its value and expertise to educate governments, enterprises, and consumers about risks, said Jeremy Waite, Head of Structured Solutions, Asia Pacific, at Guy Carpenter.
Notably, risk in the region is growing faster than its 40% share of the world’s real GDP. Over the next decade, the potential non-life premium opportunity in Asia-Pacific is US$400 billion, according to data from Swiss Re and the World Bank.
Parametric solutions and risk pools are emerging as ways to narrow Asia’s protection gap, which spans multiple perils, including: natural catastrophes, mortality, health, and retirement savings. With an average non-life insurance penetration of less than 10% in many Asia-Pacific markets, and more than US$64 billion in uninsured nat cat losses annually, the region has significant room for growth in risk transfer solutions.
Driving the protection gap are demand factors — affordability, risk literacy, and trust — as well as supply-side factors — data, capital, and regulatory frameworks. Public/private partnerships, parametric insurance, and digital distribution channels are tools that can help close the gap, which is essential for economic resilience and sustainable growth in the region.
For the insurance industry, these opportunities and threats can drive development of innovative risk solutions and partnerships that improve organisational resilience.
Shifting expectations and softening market conditions
The Marsh Global Insurance Market Index shows an average 5% rate reduction by commercial line of business in Asia for the past four quarters. Softening insurance market conditions are causing insureds to shift their expectations to broader and more flexible coverage, value-added partnerships, and faster speed of service, noted Ben MacCarthy, Managing Director and Leader, from Marsh Asia’s Insurer Consulting Group. For insurers and reinsurers, insureds’ shifting expectations require a deeper understanding of the client, more flexibility on coverage wordings and multiyear deals, and more problem-solving in a changing risk environment.
The market softening also is driving a more active merger and acquisition environment for property and casualty insurers, noted Alexander Schnieders, Global Head of Capital and M&A for Guy Carpenter. P&C carriers are seeking inorganic growth, with some significant cross-border transactions. Brokers and managing general agencies continue to pursue consolidation and strategic M&A deals. Lloyd’s underwriting entities are also attracting investments as buyers seek growth, diversification, and value opportunities.
Asian transactions account for some of the largest recent M&A deals in property/casualty insurance. For example, Sompo’s acquisition of Aspen in 2025 was valued at nearly US$3.5 billion, while MS&AD took at 15% stake in W.R. Berkley for US$3.8 billion and South Korea’s DB Insurance acquired Fortegra for US$1.65 billion.
Current market conditions suggest higher deal activity among insurers, brokers/MGAs, and Lloyd’s entities in the near term.
Adapting to talent trends
Organisations across Asia are adapting to several themes relating to talent, according to findings from Mercer’s Global Talent Trends 2026 study. Lewis Garrad, Partner and Asia Career Practice Leader at Mercer, explained several of these themes.
- Performance and productivity: Amid slowing growth and rising expenses, organisations are seeking to optimise their resources. AI is adding urgency, with 98% of organisations planning changes in the next two years to enhance performance and sustainability.
- Going global: Rising volatility and uncertainty are pushing Asian companies to diversify into new markets.
- Longevity as an opportunity: Ageing populations are reshaping the labour market in Asia. Labour participation in South Korea for workers age 65 or higher exceeds 35%, while Japan’s is 25%; both figures are well above the OECD average of 15%. Because the available talent pool is now growing in many of the region’s markets, skill sets are shifting, and organisations must adapt their talent strategies.
Stakeholder misalignment in talent priorities poses a risk of constricting growth, Mercer found. For example, the C-suite and human resources differ on AI as a tool to increase productivity, automate routine tasks, and bridge skills gaps. While 57% of C-suite executives see AI as increasing productivity and efficiency, only 40% of HR leaders do. On automation, 54% of C-suite respondents see AI as a strong tool versus only 44% of HR professionals. Views on AI as a tool to bridge knowledge and skills gaps drew even lower percentages: 37% of C-suite executives compared with 26% of HR leaders.
The insurance industry is addressing these challenges through several actions, including: piloting human and AI workflows in claims, underwriting and customer service; building reskilling programs and partnering with universities and others to access talent; and modernising work structures toward product-oriented teams that combine domain, data, and engineering skills.
Capital, technology, people, and partnership — these four themes continue to shape the region’s risk environment. Transformation is the key to unlocking the next wave of growth across the Asia-Pacific region. The Guy Carpenter team is dedicated to partnering with clients through these evolving challenges, offering expert insights and strategic guidance to navigate risk, optimise capital, and identify new avenues for value creation. Together, we are equipped to turn uncertainty into opportunity and build a resilient future.