Morgan Stanley remains bullish on the reinsurance sector, and expects durable pricing, stable capital positions, and solid book value growth to support the share price performance of companies in 2024.
Uncertainty around the remainder of the hurricane season and robust ILS capital raising has not deterred its optimism for the sector.
Analysts anticipate key drivers of reinsurance share price performances, including a stable supply of capital, underwriting profitability, book value growth, and the durable pricing environment to be sustainable heading into 2024.
Premium growth and underwriting profitability are likely to be driven by higher demand for protection, tighter terms & conditions, and sensible pricing, say analysts.
“The hard market in 2023 created a supportive environment for reinsurance to improve underwriting standards, thus positioning the industry on a more sustainable growth trajectory,” says Morgan Stanley.
Adding: “We expect the tighter terms and conditions to serve as a basis for renewals in 2024, thus supporting the property-CAT underwriting environment.”
Analysts expect reinsurers to capitalise on the current hard market environment in order to make up for several years of challenging underwriting conditions.
