Rates slow ILS growth and reinsurer discipline worries
Friday, 04 01 2016, Category: Insurance and Reinsurance, Country: World
In a recent report on the global reinsurance sector, rating agency Standard & Poor’s discusses the slowdown in the growth of ILS capital, which it said is “not due to lack of interest from investors” but rather indicates a pricing tipping point, in some peril regions.
Reinsurance pricing has continued to be under pressure in 2016 so far, from both the build-up of alternative capital, from insurance-linked securities (ILS) investors and funds, total return reinsurers and other efficient capital plays as well as continued excess traditional capital being wielded by reinsurers.
The expectation for the year and future renewals is for pricing to remain pressured, with declines in most lines, albeit perhaps at slower rates than seen over the last two years, especially in property catastrophe risks where risk appetite has been reached for many underwriters and investors.