European regulator: Reinsurance pressure to “increase further”
Wednesday, 06 22 2016, Category: Insurance and Reinsurance, Country: Europe
The global reinsurance market remains pressured due to overcapacity, stimulated by a lack of large losses causing excess capital among traditional reinsurers and the continued inflow of alternative capital, meaning the competitive pressures are likely to increase, according to EIOPA.
Europe’s insurance and reinsurance sector watchdog, the European Insurance and Occupational Pensions Authority (EIOPA), once again warns that overcapacity remains a threat to reinsurance sector profitability in its latest financial stability report.
However, the regulator has also continued its trend of being increasingly positive on the capital markets entry into reinsurance, a change in tone noted across the last few years, and in this years report EIOPA highlights that “substantial capital markets capacity” is (of course) also a factor that has helped traditional reinsurers to maintain their strong capital levels.