Pressures from ILS & reinsurance mounting in primary lines: A.M. Best
Tuesday, 06 21 2016, Category: Insurance and Reinsurance, Country: World
Reduced profitability across reinsurance business has seen global reinsurers adjust portfolios to focus on slightly more attractive primary lines. But as headwinds continue to mount and the softening landscape persists pressure is growing in this sector too, according to ratings agency A.M. Best.
With rates continuing to decline throughout reinsurance business lines at recent renewals, albeit at a slower pace in more recent times that seen in 2015, reinsurers are increasingly looking for ways to boost returns.
As a result of the impressive growth of the insurance-linked securities (ILS) space in recent years, that to date has mainly focused on property catastrophe business owing to easier entry and well-modelled and understood exposures, this sub-sector of the reinsurance market has witnessed the steepest declines.