Asian reinsurers are stepping up their presence in global markets, and Bermuda is playing a part in their strategy.

According to a new report by AM Best, reinsurers across Asia are expanding beyond their home markets to balance portfolios and strengthen long-term growth. With growth slowing in China and mature markets such as Japan and South Korea facing demographic challenges, Asian players are increasingly turning to the United States and Europe.

Bermuda has emerged as one of the destinations of choice.

Peak Re, based in Hong Kong, recently set up a Bermudian subsidiary, Peak Reinsurance North America Ltd, to underwrite US motor and casualty business. AM Best noted that this allows the reinsurer to diversify away from catastrophe-prone property risks in Asia and gain exposure to more stable long-term lines in the US.

“Overseas expansion, particularly into US casualty lines, helps balance portfolios and extend liability durations,” the report said. “This enables higher returns from matching long-term, fixed-income investments in the current elevated interest-rate environment.”

The report also pointed to Asia’s growing role in insurance-linked securities, a sector long associated with Bermuda. Taiping Re issued Asia’s first dual-trigger catastrophe bond in January, followed by a $50 million cat bond from Peak Re in April. These deals covered risks from US storms to Asian earthquakes.

At the same time, AM Best warned that softening rates and growing competition in the Asia-Pacific could spill over to global markets. That could put pressure on pricing for Bermudian reinsurers with large international portfolios, it suggested.

AM Best said global expansion by Asian reinsurers is “credit-positive”, adding that it boosts diversification and long-term resilience.