Large European reinsurers meeting cost-of-capital
Thursday, 01 28 2016, Category: Insurance and Reinsurance, Country: Europe
Continued market pressures across the insurance and reinsurance landscape in 2015 have, as expected, persisted into 2016, but despite pricing in the global reinsurance sector declining still, analysts at JP Morgan feel the larger European players are still earning their cost-of-capital.
The four large, European reinsurers analysed by JP Morgan in a recent Europe Equity Research report, Hannover Re, Munich Re, Swiss Re, and SCOR, are all still managing to meet their cost-of-capital requirements, regardless of further reinsurance market softening at the key January 2016 renewals, says JP Morgan.
“Pricing is continuing to fall, particularly in nat cats, but the reinsurers have a diversified business mix within reinsurance where the nat cat budget for claims accounts for a relatively modest 7-9.5% of premiums,” explains JP Morgan.