Price trajectory converging between reinsurance & insurance
Monday, 10 17 2016, Category: Insurance and Reinsurance, Country: World
Reinsurance pricing has been on the decline for a number of years, as regular readers will be all to aware, but during much of that time primary insurance lines still saw rate increases. That could be changing as price expectations start to converge, according to analysts at Credit Suisse.
“For a number of primary lines the rate of pricing declines has begun to converge with reinsurance,” Credit Suisse equity research analysts Ryan Tunis, John Nadel and Crystal Lu write in their latest report on the U.S. P&C insurance sector.
As reinsurance pricing has declined so far you would have thought that primary lines would have followed the market down, but this hasn’t always been the case. Yes, some property catastrophe exposed areas saw some declines, but many others saw increases in recent years as pricing perhaps got to levels that were more commensurate with the risk.