Reinsurance no longer ‘behind the curve’; margins to peak in 2024

The global reinsurance industry, which was previously “behind the curve”, has now caught up. Margins are expanding, investment income has stabilised, and the financial performance is improving, according to  Fitch. A key area to watch will be the casualty market and how social inflation will impact this year and in 2024.

Robert Mazzuoli, the director of EMEA insurance, and Brian Schneider, senior director, at Fitch Ratings, shared their insights during a Reinsurance Briefing in Monte Carlo on September 10.

“We are in the midst of a true hard market cycle, particularly in the property business,” said Mazzuoli. “The balance of power has shifted to the reinsurance industry, so they can push through price increases, change terms and conditions in their favour.”

The sector’s near-term return on capital is expected to surpass the cost of capital in both 2023 and 2024, pegged at 8 to 10 percent, they said.