Despite falling returns equity investors unlikely to exit reinsurance
Wednesday, 09 21 2016, Category: Insurance and Reinsurance, Country: World
The majority of reinsurance equity investors are likely to remain in the sector despite persistent rate declines as returns continue to be more favourable than other industry sectors, according to Standard & Poor’s (S&P).
Rates have declined in the global reinsurance industry for some time, and despite a moderation of reductions in some business lines during more recent renewals, it’s expected that the soft pricing environment is going to persist.
Clearly, for shareholders of global reinsurers lower returns is by no means ideal, but S&P feels that the increased appetite for yield and diversification among equity investors and its favourable return on capital when compared with other sectors, suggests limited investor capital withdrawal.