New reinsurance reality – Lower returns, underwriting focus
Monday, 10 05 2015, Category: Insurance and Reinsurance, Country: World
The global reinsurance market may be heading for a new reality, where lower returns are the norm and an increasing focus needs to be placed on the contribution that underwriting makes to the bottom line, according to A.M. Best.
Everyone is looking for the answer to ‘where next’ for the global reinsurance market. Will it be a case of more of the same, a complete structural and business model evolution, or somewhere in between? A.M. Best believes the market is heading for a new reality, but how challenging that will be depends on how ready reinsurers are to adapt.
Despite the continued low level of global catastrophe losses and abundance of excess capital, which has helped to buoy reinsurance company results in recent years, the market does remain challenging for reinsurers and A.M. Best notes that returns for some are beginning to show “signs of stress.”