Casualty reinsurance, advantageous but high entry barrier
Monday, 06 22 2015, Category: Insurance and Reinsurance, Country: World
While the reinsurance market remains challenging strategically sound business models become more important than ever and while casualty lines offer several structural advantages, this can mean higher barriers to entry, according to analysts at Goldman Sachs.
Reinsurers are increasingly shifting capacity into casualty lines of business, as they seek to avoid the most competitive parts of the reinsurance market in property catastrophe risks. At the same time alternative reinsurance capital and ILS players are increasingly interested in casualty risks as well.
Examining recent trends and the outlook for European reinsurers in an Equity Research study, analysts at Goldman Sachs note the structural benefits of casualty business within a portfolio, and the resulting entry barriers potential investors are faced with compared to property lines.