Warren Buffet: reinsurers will face 10 difficult years!
Saturday, 06 13 2015, Category: Insurance and Reinsurance, Country: World
Warren Buffet the American billionaire and the most successful investor without inheriting one penny from his family, so he made his fortune by choosing the right investments. He now expects reinsurance companies in the world to suffer during the next ten years from big difficulties brought about by the flow of investors in the reinsurance field. Buffet said during the general assembly of the shareholders of his group held in Omaha in the state of Nebraska that the expectations of reinsurance companies are negative and nothing can be done to change this reality. The results of reinsurance companies during the next ten years will not be as good as they have been during the past 30 years.
Buffet said that mutual funds, hedge fund as well as pension funds are rushing to establish reinsurance companies in Bermudan and other islands and states which grant tax exemptions for off shore companies. These funds think they can achieve high returns to compensate the lost income caused by low interest rates. However, the multiplication of reinsurance companies at this rapid pace in the world fuels competition and leads to price decreases against the protection cover granted by reinsurance companies.
Source: Al Bayan - Lebanon