Equity raises are increasing as pandemic pressures bite - but the future winners and losers are far from clear

12-06-2020

Claire Churchard

Equity raises are increasing as pandemic pressures bite - but the future winners and losers are far from clear

As the pandemic stress test continues, re/insurers are preparing for what comes next, including expectations of a hardening market. This is driving a growing trend for equity raises, with some building war chests and some taking advantage of new opportunities, while others look to protect their credit rating in a fight for survival. Intelligent Insurer reports.

“As is often the case under a severe stress scenario, the strong appear to get stronger and the weak appear to get weaker, there may be an element of that. Who can and can’t raise capital.” Stuart Shipperlee, managing director, Litmus Analysis.

· Since mid-March there have been at least 67 COVID-19-related equity raises 
· Experts point to price firming as driver for building "war chests"
· Reinsurance and specialty environment "more challenging" for credit ratings
· Adverse reserve development still a threat hiding in plain sight 

Major insurance industry firms are in the thick of the growing trend for equity raising.


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