The regulatory landscape in the Asia-Pacific region is rapidly evolving, influencing insurers’ risk management and capital adequacy. Australia and Malaysia are two examples of markets where recent regulatory developments are likely to influence the use of reinsurance, in particular.
Regulators in both nations are proposing adjustments to their capital frameworks to tackle evolving challenges, such as increased catastrophe risks and the need for robust financial resilience.
Australia’s Reinsurance Reforms
The Australian Prudential Regulation Authority (APRA) has proposed changes to reinsurance-related capital requirements to improve access to reinsurance protection. APRA’s reforms include mandating all-perils reinsurance coverage, reducing reinstatement requirements and removing the need to hold reinstatement premiums as part of the insurance concentration risk charge (ICRC).
These initiatives are designed to encourage the use of altern