Some European renewals aggressively priced below expected loss
Thursday, 12 31 2015, Category: Insurance and Reinsurance, Country: World
According to sources in both the insurance-linked securities (ILS) and traditional reinsurance markets, some of the European property catastrophe reinsurance programs coming up for renewal at 1st January 2016 are aggressively priced, with indications at levels below expected loss.
This trend was witnessed at other recent reinsurance renewals, with European property catastrophe risks being called the most aggressively priced in the marketplace, resulting in some risks with very thin margins beginning to look almost unprofitable.
The reasons for this are many, but the fact that risks are being priced at levels near, or even below, the modelled expected loss raises the specter of those underwriting such risks taking on significantly more exposure at ever dwindling margins or return.