Reinsurance News
interest rates
Swiss Re’s John Zhu highlights divergent interest rates for 2024
21st December 2023
Economies around the world and inflation are predicted to improve next year, which will lead central banks like the US Federal Reserve (Fed Reserve) to cut interest rates in 2024, although countries like China might do it sooner, while Japan could increase rates, Swiss Re’s John Zhu explained in a ... Read the full article
Global reinsurers navigate challenges and opportunities amidst rising interest rates: AM Best
1st December 2023
In response to the recent surge in interest rates, the global reinsurance market has experienced a mixed landscape, according to a report by AM Best. The rise in interest rates has triggered concerns about unrealised investment losses, but reinsurers have demonstrated resilience in managing these challenges. Property/casualty reinsurers, in particular, have retained ... Read the full article
Declining interest rates causing increased reinvestment risk for insurers in China: AM Best
16th October 2023
Declining interest rates in China are said to have led to narrowing spreads and increased reinvestment risk for domestic insurance firms, which ultimately places a greater onus on insurers' asset-liability management. Global ratings agency AM Best, has stated that with yields of 10-year government bonds remaining below 3% across the past ... Read the full article
Global M&A sees record decline in H123, driven by interest rate rises & economic uncertainty: WTW
6th July 2023
Global M&A witnessed a record decline in the first half of 2023 as interest rate rises and economic uncertainty hit financing. Research on completed deals from global broking firm WTW’s Quarterly Deal Performance Monitor (QDPM) shows that activity for deals valued over $100 million slowed significantly across the globe during H123, ... Read the full article
Allianz, Axa and Zurich ‘successfully managed’ inflation, interest rate risk: Fitch
13th April 2023
Fitch Ratings said the three main European insurance groups – Allianz, AXA and Zurich - "successfully managed" the effects of the macroeconomic environment like high inflation and interest rates. "Allianz, AXA and Zurich successfully managed 2022’s macroeconomic challenges thanks to their very strong company profiles, rigorous risk management and sophisticated asset- ... Read the full article
Life insurers facing unrealized losses due to pace of interest rate rises: Moody’s
20th March 2023
A report from Moody’s Investors Service has suggested that while the increase in interest rates within the last year has been positive for life insurers in Europe, the fast pace of the increase means that a majority of insurers are now sitting on significant unrealized losses in their fixed income ... Read the full article
SVB failure: AM Best highlights importance of stress testing against rising interest rates
13th March 2023
Although insurers' exposure to the banking sector extends beyond stock impacts, providers of life insurance are less vulnerable to the kind of short-term volatility seen with the failure of Silicon Valley Bank (SVB), according to AM Best. The ratings agency reports that, based on year-end 2021 data, just eight companies have ... Read the full article
Creditworthiness of Japan’s insurers likely to remain stable in 2023: S&P
13th February 2023
With inflation and its consequences roiling global financial markets, preparations for tougher times by Japan’s insurers are looking to have paid off, according to S&P Global Ratings. In S&P’s view, the creditworthiness of Japan’s insures will likely remain stable in 2023. With financial markets likely to continue to fluctuate due to central ... Read the full article
Interest rate rises signal relief for re/insurers’ returns: Swiss Re
10th February 2023
Analysts at Swiss Re have reported that a move towards monetary policy normalisation is positive for re/insurers, as investment income is a key driver of earnings for the sector. However, they add that higher interest rates and less bond market intervention by central banks could also mean a return to a ... Read the full article
P&C leverage ratios remain elevated due to capital declines: AM Best
1st February 2023
A new report from AM Best has stated that a combination of factors which includes rising interest rates, increased unrealized losses, and declines in capital, has led to leverage ratios ticking up among US property & casualty (P&C) insurers. The report, titled ‘U.S. P/C Insurers’ Leverage Ratios Remain Elevated Due to ... Read the full article
High inflation & spikes in interest rates cause challenging renewal season: Aon
31st January 2023
Aon’s January Reinsurance Market Dynamics report: Macro Conditions: Extreme Volatility, cites 2022 as being tricky for the industry, with inflation hitting multi-decade highs, as well as interest rates rising to an almost “unprecedented pace”. The report also noted that equities had their worst year since 2008, and for the first time ... Read the full article
US life insurer investment portfolios to withstand market volatility: Fitch
5th January 2023
Analysts at Fitch Ratings have stated that rising rates have been largely favourable for US life insurer investment portfolios, driving higher investment income as reinvestment rates exceed book yields. The rising rates have played a large role in helping to mitigate macroeconomic headwinds, market volatility and the heightened probability of mild ... Read the full article
2023 set to be hardest property reinsurance market in history: Argo’s Snyder
23rd December 2022
Jessica Snyder, President, US Insurance, Argo Group, suggests that there will be an unprecedented hardening of the reinsurance markets across property and casualty lines in 2023, with ceding commissions down 2-4 points and perhaps the "hardest property reinsurance market in history." Further, Snyder notes that the evolving risk landscape will persist ... Read the full article
Unrealised losses on fixed maturities caused by rising interest rates: AM Best
19th October 2022
According to a report from AM Best, publicly traded insurers have reported more than $200bn of unrealised losses on their fixed-income portfolios through the second quarter of 2022, as rising interest rates have diminished bond values. The report states that over a quarter of publicly traded insurers have lost more than ... Read the full article
Reinsurer earnings hit by interest rates & hurricane activity: DBRS Morningstar
5th October 2022
Despite lower combined ratios, global reinsurers' overall profitability declined significantly in H1 of 2022, primarily reflecting higher interest rates that adversely affected equity and bond valuations, and the mounting pressure of the ongoing Atlantic hurricane season, says DBRS Morningstar. According to the report, global reinsurers performed significantly worse compared with the ... Read the full article
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