Fitch Ratings has maintained a 'neutral' outlook on the APAC insurance sector for 2026. This reflects robust performance and strong solvency buffers across most markets in the region.
A 10-page non-rating action commentary published by the rating agency on 3 December 2025 expects the operating margins to hold up amid improving competitive dynamics, despite regulatory change, slower growth and market volatility.
It said the growth in life and non-life markets is likely to moderate in most markets. Life insurers will keep prioritising quality growth and product profitability. Non-life insurers will focus on underwriting discipline and efficiency.
It expects non-life insurers to benefit from softer reinsurance pricing, while life insurers should sustain product profitability and apply dynamic asset–liability management through regulatory transition and volatile markets. Investment results may be pressured by lower yields and heightened volatility, alongside a modest shift toward riskier assets.
Insurers are preparing for, or adapting to, evolving solvency regimes via capital-raising and proactive asset–liability management. Capital buffers should remain sound, although market volatility is a key risk.
Fitch Ratings maintains deteriorating outlooks on the China life and Taiwan life sectors. China life faces slower premium growth under tighter commission rules, and earnings sensitivity to equity-market volatility. Taiwan life may see capital pressure as new standards take effect in 2026, with higher interest-rate risk charges under the new solvency regime, adverse FX movements and rising hedging costs weighing on earnings.
Around 92% of Fitch-rated APAC insurers are on a stable outlook, reflecting the rating agency’s expectation that most insurers’ capital and earnings metrics will remain broadly stable and within their respective rating sensitivities.
The commentary has affirmed most Taiwanese life insurer ratings with stable outlooks in November 2025, removing the prior negative watch triggered by sharp Taiwan dollar appreciation and FX mismatches. The actions reflect the agency’s view that earnings and capital remain supportive under its base-case exchange-rate forecast.
There were 11 rating upgrades and three rating downgrades during 2025.