The pressure is more intense for reinsurers that have relatively greater exposure to the propertycatastrophe business and for those that benefit less from diversification and have narrow or commoditized product offerings.
During the past two years, the global reinsurance sector had no respite.
Despite back-to-back active catastrophe years in 2017 and 2018, which were the third- and fourth-costliest insured catastrophe years in the past few decades, global reinsurance price increases remain modest at best. With about $80 billion in natural catastrophe insured losses in 2018, market participants were keenly awaiting the renewal season hoping to restore their underwriting profits. But global reinsurance pricing was, once again, only flat to up about 3% in aggregate during the January 2019 renewals - mimicking a similar scene from a year ago that played out during the renewal season in January 2018. Moreover during the recent renewals, we saw more and more regionalization of reinsurance pricing. In other words, we no longer witness a rising tide that lifts all boats, but rather, targeted price increases limited to policies and regions that were affected by losses without any spillover effect to other lines of business or regions.
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S&P Global Ratings Sees The Global Reinsurance Market Bulking Up
Kennisbank •
The reinsurance sector has been facing significant headwinds and weak business conditions for a number of years now, and we do not foresee a significant change in the underlying conditions.
Over de auteur
Johannes Bender
is director at S&P Global Ratings, Frankfurt am Main (Germany).