Reinsurance News

Monte Carlo Rendez-vous Reinsurance News

11th September 2016 - Author: Steve Evans

Here’s your daily Reinsurance News for Sunday 11th September 2016:

Monte Carlo Reinsurance RendezvousThe 2016 Monte Carlo Reinsurance Rendez-vous is underway, the 60th anniversary of the reinsurance, insurance and more recently insurance-linked securities (ILS) meeting in the south of France, where market participants discuss prospects for the next major reinsurance renewal season.

To get up to speed on market trends this email features all of our sister-service Artemis’ Monte Carlo Reinsurance Rendez-vous 2016 coverage.

We hope you enjoy this snapshot of the market and its prospects.

Interview – Transparency an issue across insurance, not just ILS: Bill Dubinsky, WCMA
September 11th, 2016 – In the latest in our series of interviews with figures from the risk transfer and insurance-linked securities (ILS) and reinsurance markets, at the Monte Carlo Reinsurance Rendezvous 2016, Artemis spoke with Bill Dubinsky, Managing Director & Head of ILS at Willis Capital Markets & Advisory (WCMA).

Tremor - The modern way to place reinsurance

Post-loss capacity most likely to come from capital markets: A.M. Best
September 11th, 2016 – Ratings agency A.M. Best expects alternative reinsurance capital to continue entering the reinsurance sector for the foreseeable future, with the majority of any additional capacity inflows after the next large event most likely to come from the capital markets.

Blockchain is “made for reinsurance”, a $10 billion opportunity: PwC
September 11th, 2016 – Blockchain, or distributed ledger technology, was “made for reinsurance,” according to PwC, and could represent a cost saving opportunity of up to $10 billion as companies look to increase efficiency and understand what the development of insurtech means for their business.

Excess capital threatens Bermuda re/insurer performance: Fitch
September 9th, 2016 – The profitability of Bermuda domiciled reinsurers is under threat from the abundance of traditional and alternative reinsurance capital that continues to drive down pricing in the sector, among a series of other market challenges, according to Fitch Ratings.

Interview – Mercury MiCRIX shows stable, attractive returns of ILW investments: CEO
September 9th, 2016 – The performance of the Mercury investible Catastrophe Risk Index (or MiCRIX for short) demonstrates that stable and attractive returns are possible by investing purely in industry-loss warranty (ILW) instruments, according to Mercury Capital Ltd. CEO Charlie Griffiths.

ILS pricing likely to remain adequate for superannuation funds: Cory Anger, GC
September 9th, 2016 – The pricing of insurance-linked securities (ILS) and other collateralized reinsurance assets in the alternative capital space, is expected to remain adequate for the segments largest investors, superannuation funds, despite an expectation of further rate reductions to come.

Alternative capital across ILS hits new heights at $75.1bn: Aon Securities
September, 9th 2016 – Alternative capital in the insurance and reinsurance market and across the range of insurance-linked securities (ILS) products has reached new heights, hitting $75.1 billion by the end of June 2016, an increase of 10% over the last year, according to Aon Securities.

Interview – Getting closer to the risk helps Securis enhance its returns: Rob Procter
September 8th, 2016 – Bringing the third-party investor capital that it manages closer to the customer, the source of insurance or reinsurance risk, helps specialist ILS investments manager Securis Investment Partners enhance its returns, according to CEO Rob Procter.

EU’s large cedants take advantage of market conditions & ILS: A.M. Best
September 7th, 2016 – The 20 largest European cedants are making the most of the softening reinsurance market cycle and the abundance of traditional and alternative reinsurance capital, according to A.M. Best.

Too early to call the bottom for catastrophe reinsurance prices: Moody’s
September 7th, 2016 – Despite the signs that pricing pressure is easing across global property catastrophe reinsurance pricing, it is still “too early to call the bottom” of the pricing cycle at this time, according to rating agency Moody’s Investors Service.

Realistic reinsurance RoE’s fall to 4.5%, challenges to continue: Willis Re
September 7th, 2016 – The realistic or underlying return on equity (RoE) of a group of reinsurance firms tracked by Willis Re fell to 4.5% in the first-half of 2016, as higher natural catastrophe losses and ongoing competitive threats continue to erode reinsurer profits.

ILS enlarges reinsurance, complements it, says SCOR. But is it in contest?
September 7th, 2016 – The development of the insurance-linked securities (ILS) market has helped to enlarge global reinsurance capacity, according to SCOR one of the world’s largest traditional reinsurers, and the firm says alternative capital is a complement to reinsurance, not a substitute for it.

Stabilising prices a false hope for reinsurance profits: Fitch
September 7th, 2016 – The reduced profitability of global reinsurers will be a key risk for the industry in 2017 warns Fitch Ratings, suggesting that some companies could see their ratings impacted by profit deterioration. Fitch also warns that reports of stabilised prices are a false hope for increased reinsurance profits.

Global reinsurance industry returns will continue to weaken: S&P
September 6th, 2016 – The softening reinsurance market cycle has persisted for longer than many market players and observers had anticipated, suggesting that global reinsurance industry returns will likely weaken further, according to analysis from Standard & Poor’s (S&P).

Capital market capacity pressures reinsurance to innovate: A.M. Best
September 6th, 2016 – The growth of ILS capacity backed by capital market investors in the global reinsurance market is “pressuring the reinsurance sector to work to charge less” according to A.M. Best, pressure that is not decreasing with alternative and ILS capital now contributing 20% of the markets capacity.

Only the costliest catastrophe could turn reinsurance pricing: RBC
September 5th, 2016 – Despite catastrophe losses in the first-half of 2016 being above the long-term average, “only the most severe event” would result in any meaningful turn from the soft reinsurance pricing, according to analysis from RBC Capital Markets.

Reinsurance is on the edge of profitability
September 1st, 2016 – Reinsurance firms are on the edge of profitability, with combined ratios rising and an expectation that even an average year of catastrophe losses could tip some companies over the edge, as market pressures continue to bite. We discuss the potential for evolutionary change to the traditional market’s business model.

Alternative capital both competitor & partner of London market: A.M. Best
August 31st, 2016 – Despite being a clear contributor to the competitive operating environment, London market insurers and reinsurers continue to increase their use of capital markets capacity to protect their balance sheets, according to A.M. Best.

Asian reinsurance demand poised for growth: Fitch
August 30th, 2016 – Regulatory developments and advances across Asia has the potential to drive an increase in reinsurance demand in the region and, with insurance penetration being amongst the lowest anywhere in the world there’s ample opportunity for growth, according to Fitch Ratings.

“Steep decline” in reinsurance operating results in H1 2016: Fitch
August 30th, 2016 – Reinsurance company operating results suffered a “steep decline” in the first-half of 2016, according to Fitch Ratings, as return on average common equity (ROAE) plummeted by 36% compared to the same period in the prior year.

Cyber the fastest growing peril, will require reinsurance & ILS capital
August 25th, 2016 – Cyber risk is reportedly the fastest growing insured peril across the global property/casualty (P/C) insurance space, with the market forecast to expand to $20 billion by the year 2020. With the potential exposure so vast there’s a clear need for reinsurance capital, suggesting opportunities for ILS markets.

Soft market aggregation build up a risk for reinsurers: Fitch
August 25th, 2016 – There is a risk that some reinsurance companies may have picked up “unintended aggregations” as they fight to retain business and compete their way through the soft market cycle, which presents a risk of certain firms facing larger than expected losses, according to Fitch Ratings.

Challenges prompt London Market rethink, efficient capital & tech key: PwC
August 19th, 2016 – The abundance of capital in the global reinsurance industry and the increased prevalence of insurance-linked securities (ILS) continue to add to the challenges faced by the London insurance and reinsurance market, making efficiency increasingly important, according to Paul Delbridge of PwC.

Reinsurers utilising ILS & retro to mitigate profit deterioration: S&P
August 17th, 2016 – The persistent inflow of alternative capital in the global reinsurance industry has enabled reinsurers to adjust their risk transfer strategies, as companies look to offset continued, and potentially damaging profitability deterioration, says Standard & Poor’s (S&P).

Reinsurance faces the strongest headwinds: RBC
August 16th, 2016 – Of all the segments within the insurance and reinsurance market, it is the reinsurers that analysts at RBC Capital Markets believe face the strongest headwinds still, as indicated by some companies higher than expected combined ratios at the mid-year point.

On spending your way out of a soft re/insurance market
August 11th, 2016 – The results of many of the insurance and reinsurance industries leading players, over the first-half of 2016, show that one response to a challenging, competitive and softening market, is to try to spend your way out of it.

Reinsurance price surge after mega-loss to be smaller: Deutsche Bank
August 3rd, 2016 – Analysts at Deutsche Bank have warned that even a mega industry loss event might not be enough for reinsurers to sufficiently push up pricing due to capacity and capital, further evidence of the flattening of the market cycle.

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