Reinsurance down but not out
Friday, 04 24 2015, Category: Insurance and Reinsurance, Country: World
In a new report Towers Watson has recommended that investors review their strategic allocation to reinsurance as a form of diversification, despite falling premiums and rates standing at the low end of the historical range.
The report shows that premium rates are lower due to claims being at a low enough level for the majority of losses to be retained by primary insurers. As a result, reinsurance capital reserves have increased.
Combined with positive returns on these reserves, a downward pressure on premiums as a strong cyclical supply of reinsurance capital requires a lesser risk premium to encourage it to be put at risk, according to Towers Watson.
Source: Captive Insurance Times