Menu

Reinsurance News

Reinsurance softening persists at mid-year renewals: Willis Re

3rd July 2017 - Author: Luke Gallin

Despite reinsurers’ results continuing to deteriorate in the first-quarter of 2017, mid-year reinsurance industry renewals saw a continuation of the downward trend seen at January 1st and April 1st, according to Willis Re’s latest 1st view report.

Declining reinsurance profitsThe softening reinsurance market landscape persisted at the mid-year renewals, with buyers taking advantage of favourable terms and pricing, while reinsurers continue to see performance deteriorate with underwriting and investment returns increasingly difficult to come by.

Willis Re said that as seen at the January and April renewals, while the softening has persisted and rates continue to fall, it’s yet to reach an unacceptable level, suggesting more challenging times are ahead, which would be exacerbated by a rise in loss activity and expenses.

Yet again, we’re in a position where the weakening in the global reinsurance industry’s performance has not reached an unacceptable level. Reinsurers across the board do not yet feel compelled to take a stronger stance over conceding further modest rate reductions and walking away from clients. Much now will depend on loss activity in the traditionally more active third and fourth quarters and on any instability in investment returns,” said John Cavanagh, Global Chief Executive Officer (CEO), Willis Re.

The combined ratio for many classes of business are now looking unattractive, and Willis Re said that the underlying loss and expense ratios for many reinsurance companies are showing “a worrying trend.”

RMS

Cavanagh explained that continued reinsurance market softening at mid-year was due to the realisation from the market that “June and July renewal seasons are the last realistic chance for underwriters to meet their 2017 premium targets,” and with competition from traditional and alternative markets high, further softening perhaps isn’t too surprising.

“More localized issues such as the Ogden tables in the U.K., poor results in some specific lines of business and uncertainty over Brexit, are unlikely to generate sufficient impact on a global basis to arrest the current global softening trend,” said Cavanagh.

Print Friendly, PDF & Email

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.

Read previous post:
De-risking the right step for Novae: Peel Hunt

Recent and ongoing steps taken to de-risk itself will benefit Lloyd's insurance and reinsurance specialist Novae Group, according to analysts...

Close