Divergent reins. sector rating outlooks
Monday, 07 23 2018, Category: Insurance and Reinsurance, Country: World
Rating agencies continue to hold divergent outlooks for the global reinsurance sector, with prolonged market softening and 2017 catastrophe losses driving down profits, while the sector’s capital adequacy remains very strong in 2018, reports global insurance and reinsurance broker, Aon.
Both A.M. Best and Fitch hold a negative outlook for the reinsurance sector, driven by years of rate reductions prior to Q3 2017 catastrophe events, the low interest rate environment, combined with the impact of last year’s catastrophe events, all of which served to diminish profitability.
In contrast, both Moody’s and S&P hold a stable outlook on the sector, noting that despite market challenges, capital adequacy remains very strong in 2018, combined with the fact that 2017 catastrophes will be an earnings event for many, and not a capital event.