Diversified reinsurers risk continuation of pricing pressures
Tuesday, 09 08 2015, Category: Insurance and Reinsurance, Country: World
As global reinsurance prices continue to soften, underwriters in the space are faced with pressures leading to a search for scale and diversification. But analysts at Bernstein have warned that firms that are highly diversified could ultimately prolong pricing pressures.
Typically, analysis and industry insight on the softening reinsurance sector has underlined the benefits of a diversified risk portfolio, utilising the returns of differing risks to maintain sustainable profitability as well as hedge exposures against one another.
However, analysts at portfolio management and investment research firm Bernstein, in a recent report, note the possible risks associated with firms that aren’t solely a reinsurer, or that utilise a highly diversified business mix, as a result of the softening re/insurance landscape.