Miller eyes Asia growth as discipline remains strong

Rates are softening on some lines of business in Asia. That was one of the key messages as EAIC Today caught up with Miller’s property and casualty (P&C) and treaty brokers in Hong Kong to gain insight into the market trends in Asia-Pacific and the evolving dynamics shaping the business.

“We saw signs of softening at the start of the year, but we didn’t expect the rates to reduce so significantly,” said Chihiro Maekawa, head of property and casualty, Asia, at Miller. The notable decline in rates has been a relief to clients after years of hardening market conditions, she said. 

However, Maekawa emphasised that while rates are falling in some areas, the market continues to uphold discipline overall. “While rates are softening, underwriting discipline around deductibles and coverage remains strong,” she added, pointing to the continued focus on maintaining robust terms and conditions despite the changing pricing environment.

“In the Philippines, many proportional treaty facilities are being withdrawn.”

On the treaty side, the market picture is more nuanced, especially in Asia. Over recent years, the region has faced significant shifts in proportional treaty capacity and a tightening of terms by reinsurers. 

“Proportional treaty capacity reduced significantly, and reinsurers started imposing loss participation clauses and reducing event limits,” explained Miller treaty broker Mandy Phan.

This trend has impacted various countries across the region, including Malaysia and Vietnam, but has been especially challenging in catastrophe-prone areas such as the Philippines and Indonesia. “In the Philippines, many proportional treaty facilities are being withdrawn, and much of the remaining capacity excludes natural catastrophe risks,” Phan noted. 

As a result, some insurance companies have had to pivot. “Some insurance companies were forced to move to gross excess of loss because the proportional terms were just not viable for them,” she explained. 

While “a mini-market hardening” was expected in some areas, Vietnam has seen little of this. “We don’t see that much hardening in Vietnam, but we did see quite substantial changes in Malaysia, Philippines, and other parts of Asia,” Phan pointed out.

Despite these challenges, opportunities are emerging, particularly as markets soften. Maekawa highlighted that underwriters are becoming “a bit more flexible and willing to explore creative solutions”, which allows brokers such as Miller to craft innovative strategies for their clients. These creative solutions, which are often harder to implement in a hard market, are now more accessible as the market loosens.

Expansion

Miller is strategically positioning itself to capitalise on these market conditions. The firm has been expanding its product offerings in Asia, including treaty, marine, and financial lines, as part of a broader effort to mirror the capabilities of its UK headquarters. 

This product growth is paired with geographic expansion: Miller has bolstered its regional presence through acquisitions and new hires. “We’ve been expanding our product offering in Asia, and this aligns with our strategy of long-term sustainable growth,” said Maekawa.

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