The current soft property/casualty (P&C) reinsurance market is unlikely to harden in 2018 despite recent nat cat events, according to research firm CreditSights analysts.
On the one hand, the analysts argue, the losses from recent events are not “big enough” to change the pricing trend. In addition, it appears that the P&C reinsurance market faces an excess of supply not least because of players’ strong capital positions while primary insurers have slightly reduced their reinsurance needs. Furthermore, reinsurers have experienced a good underwriting profitability level over the past few years, according to an Oct. 5 research note.
Prices continued to decline in 2017. On average, the renewals in January, April and July 2017 showed a 5 percent to 15 percent decline in rates. Alternative sources of reinsurance cover have played their part as supply has grown dramatically over the past few years. However, cat bonds, ILS and sidecars tend to focus on specific lines of business and are not threatening to steal a significant share of business from the top ten reinsurers, which tend to offer tailor-made reinsurance programmes.
CreditSights, Reinsurance, Natural catastrophe, Global