London casualty reserves vulnerable
Thursday, 05 26 2016, Category: Insurance and Reinsurance, Country: United Kingdom
With adequate profits on investment and underwriting sides of the balance sheet increasingly hard to come by for insurers and reinsurers, reserve releases have helped to bolster returns. However, casualty reserves in the Lloyd’s and London market are vulnerable to adverse run-offs in the future, according to PwC.
Insurers and reinsurers in the specialist Lloyd’s of London marketplace have relied on prior year reserve releases to boost returns for some time.
However, a recent market review by PwC highlights that apparent change in the reserving strength for casualty business written during 2015, suggests that in the future re/insurers might not be able to rely on reserves to strengthen financial results as they have in the past.