Reinsurers average return on equity tumbles in 2015
Friday, 03 18 2016, Category: Insurance and Reinsurance, Country: World
Average returns on equity (ROE) across a group of property & casualty reinsurance firms operating in the U.S. have tumbled “materially” on an operating basis and “precipitously” on an income basis, according to rating agency Fitch.
It’s been clear for a number of years that reinsurance company returns on equity (ROE) were on the wane, with the impact of steep pricing declines and high competition, combined with the influence of new capital and business models all impacting the profitability of the sector.
The added pressure from poor investment returns and unrealised losses on certain assets, premium growth that is failing to keep pace with loss cost trends, plus more attritional loss experience, both man-made and more frequent catastrophe or weather, has all driven the decline.