Reinsurance cycle signals reduced payout period post-event
Wednesday, 09 30 2015, Category: Insurance and Reinsurance, Country: World
Cyclical changes in the global reinsurance sector; underlined by a supply/demand imbalance, lower cessions and a wave of competition, suggests that the impact of a significant loss event would likely be restricted to one or two renewals, says JLT Re.
The persistent influx of alternative reinsurance capital from institutional and third-party investors, which gained momentum in 2011 following the financial crisis and which has intensified over the last 12 months or so, created a supply/demand imbalance in the reinsurance industry and a trend of declining pricing.
The sustained inflow of alternative reinsurance capital led to a supply and demand imbalance “greater than any seen in recent memory,” says JLT Re, claiming that the glut of supply is so great that a $130 billion loss event would likely “be restricted to one or two property-catastrophe reinsurance renewals.”