Reinsurance cycle won’t turn until situation is critical
Wednesday, 02 17 2016, Category: Insurance and Reinsurance, Country: World
Analysts at Bernstein have warned against the dangers of “bad business” and “underpriced risk” in the reinsurance sector, while reminding market players that in order for the softening environment to turn, “first there must be blood.”
The global reinsurance market has continued its softening trend during the opening weeks of 2016, with rate reductions occurring across the majority of business classes, and reportedly down by roughly 5% to 10% in the property catastrophe arena.
Despite this, an ongoing benign catastrophe loss environment has seen some firms report profitability and growth during difficult market conditions, with some reinsurers confident of earning attractive returns “when the market turns,” says Bernstein.