23 June 2017 News

Global reinsurers face another year of falling rates: S&P

Global reinsurers face further rate declines in 2017, driven by an abundance of reinsurance capacity and many years of modest insured losses, according to a June 23 S&P report titled, "Déjà Vu All Over Again: Global Reinsurers Awake To Another Year Of Declining Rates."

Competitive pressures remain high as reinsurers continue to search for attractively priced risks. Meanwhile, pricing has continued its downward trajectory, with market participants quickly absorbing any pockets of growth and isolated price strengthening.

"We are maintaining our stable outlook on the reinsurance sector, with its sophisticated enterprise risk management constructs, still-rational underwriting, and robust capital,” said S&P Global Ratings credit analyst Taoufik Gharib.

“However, any aggressive growth through underpricing, especially in the softer lines, while providing cheap capacity to cedants will likely trigger negative rating actions," he warned.

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