Persistent headwinds in the global reinsurance sector are expected to continue throughout 2017 and into next year, with Moody’s suggesting that the January 2018 property and casualty (P&C) reinsurance renewals will see further softening across most business lines.
Price declines in the reinsurance sector have slowed in more recent times, a trend that Moody’s analysts expect to continue and even accelerate into 2018.
In light of the challenging market conditions, exacerbated by the persistent inflow of alternative and traditional capital while demand for reinsurance remains relatively flat, Moody’s has said that P&C reinsurance renewal prices will continue to soften across most business lines.
Supporting this, is Moody’s Reinsurance Buyer Survey, which reveals that most cedents expect the property segment to experience further softening at January 1st, 2018, with declines anticipated to be in line with last year’s 0% – 5% reductions.
However, almost 50% of cedents now expect to witness some pricing stability in the casualty segment. This is in contrast to last year, when around 40% of survey respondents expected prices to fall by roughly 5%, in the casualty segment.
Alternative capital continues to expand and claim a larger slice of the overall reinsurance market pie, and, much of its focus remains on the property catastrophe space. In light of this and other, ongoing market headwinds that are impacting the global reinsurance sector, it’s not too surprising that Moody’s and cedents expect rates to continue softening in this segment of the market at the upcoming January 1st, 2018 renewals season.