NMG Consulting’s latest analysis reveals that hard markets present both opportunities and challenges for reinsurance brokers in Asia.
During these cycles, brokers generally see increased demand for their services, allowing them to operate at full capacity. However, hard markets also bring heightened pressures on partnership and placement capabilities, with brokers often facing criticism for issues beyond their control.
One year after the hard-market reset, reinsurance brokers in Asia have generally received higher overall ratings from insurers, according to insights from NMG Consulting. Notably, the largest franchises have benefited the most.
However, the analysis shows a drop in ratings for “partnership approach” and “business ease and timeliness,” key components of the client experience. This decline may reflect broker resource constraints or other unexpected challenges, especially as recent renewals were reportedly more orderly than anticipated.
NMG also highlights an improvement in ratings for brokers’ “data analytics & models,” suggesting alignment with evolving client expectations.
The current hard-market cycle brings added scrutiny to broking appointments, as clients may perceive brokers as benefiting disproportionately while reinsurance costs remain high. In light of these dynamics, reinsurance brokers are urged to reinforce their client service as they move toward 2025.
NMG Consulting notes that the reduced scores in “partnership” and “business ease & timeliness” raise concerns, even though the baseline was influenced by recent disruptions such as COVID-19.
For insurers in Asia, the practice of engaging multiple reinsurance brokers – typically three on average – remains common. Insurers assign brokers different roles based on each firm’s strengths, with a clear lead broker often taking a primary position.
NMG Consulting’s data shows that brokers in lead roles have seen steady improvements in partnership ratings, particularly in 2024, which suggests a strategic focus on these key relationships. The top three franchises account for approximately 80% of lead appointments in the region, reinforcing the importance of established client partnerships.
The study points to challenges for brokers in non-lead roles, particularly as partnership remains a crucial value driver that is not dependent on the size of the firm. NMG Consulting notes that broker effectiveness in winning new lead accounts could become a significant differentiator, with brokers demonstrating varied levels of activity and focus in their strategies for new business.
As a result, brokers’ future growth in Asia may be closely tied to their ability to expand beyond existing client relationships and successfully secure new lead appointments.
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