Moody’s expects stronger reinsurance profitability in 2019
Saturday, 06 15 2019, Category: Insurance and Reinsurance, Country: World
Analysts at Moody’s Investor Services are anticipating stronger reinsurance sector profitability in 2019, supported by significantly higher pricing in the property catastrophe market.
The firm believes that reinsurers are entering the 2019 hurricane season with solid capital positions and should be able to comfortably withstand any potential losses arising from hurricanes.
Reinsurance capital has also remained largely steady despite nearly $240 billion of total insured catastrophe losses over the previous two years, it noted.
These losses have been accompanied by significant adverse loss reserve development from Florida hurricanes and Japanese typhoons, which have driven reinsurers to recalibrate catastrophe assumptions related to escalating loss costs and underappreciated risk exposures.
Additionally, Moody’s obeserved that alternative capital has not flooded the reinsurance market with further capacity due to adverse development from the 2017 and 2018 events, creating a considerable amount of trapped collateral that cannot support new business.