The problem, to put it bluntly: too much recent success, both in underwriting
and non-insurance investment performance, which has resulted in record levels of capitalization in the reinsurance industry group. It gets a bit worse. Going into this year, that excessive reinsurance capacity is now combined with the relatively flush financial condition of customers (primary insurers), who won’t necessarily have the same need themselves to purchase re-insurance to the levels they have the past few years. The result: while reinsurance premiums for a very few categories are up (offshore marine drilling reinsurance rates are up something like 30%) most all other reinsurance categories are flat-to-down-10%, according to that industry magazine report.
A disproportionate amount of the world’s reinsurance is set up in January. So this may be a good, timely call, as we look ahead to the year. Thanks!
Reinsurance magazine link: http://www.reinsurancemagazine.com/magazine/index.html
and non-insurance investment performance, which has resulted in record levels of capitalization in the reinsurance industry group. It gets a bit worse. Going into this year, that excessive reinsurance capacity is now combined with the relatively flush financial condition of customers (primary insurers), who won’t necessarily have the same need themselves to purchase re-insurance to the levels they have the past few years. The result: while reinsurance premiums for a very few categories are up (offshore marine drilling reinsurance rates are up something like 30%) most all other reinsurance categories are flat-to-down-10%, according to that industry magazine report.
A disproportionate amount of the world’s reinsurance is set up in January. So this may be a good, timely call, as we look ahead to the year. Thanks!
Reinsurance magazine link: http://www.reinsurancemagazine.com/magazine/index.html
