Ratings agencies see lower reinsurance prices in 2017
Wednesday, 09 07 2016, Category: Insurance and Reinsurance, Country: World
Reinsurance premiums are likely to continue to fall next year, ratings agencies said on Tuesday, following years of weaker prices due to competition in the sector and a lack of natural catastrophe losses.
Reinsurers act as a financial backstop for insurance companies, helping them pay for large damage claims from hurricanes or earthquakes in exchange for part of the premium.
High returns in the sector in comparison with puny interest rates in the developed world have encouraged new players to compete for reinsurance business, while a relatively low number of major natural catastrophes has depressed the prices households and businesses are prepared to pay for protection.