Life reinsurance underappreciated by market
Thursday, 09 06 2018, Category: Insurance and Reinsurance, Country: World
Analysts at J.P. Morgan believe that the life reinsurance business is underappreciated by the market and, due partly to restriction of competition by high entry barriers, consider its long-term growth outlook to be strong.
The majority of premium and profit in life reinsurance is generated by in-force portfolios, resulting in a predictable earnings stream that will be recognised over many years.
Subsequently, new entrants face a lengthy period of investment before turning profitable. This, the report says, is difficult for many to justify and results in a less concentrated marketplace.