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Rates in reinsurance to increase for the first time since 2013


Andrea Lubeck

January 25, 2018 11:30

Photo : Freepik

The overall rates of reinsurance increased approximately 5 % during the round of renewal to January 2018, according to a report from S&P Global Ratings. This is the first increase since 2013, has been reported to turn the firm credit rating Fitch Ratings. Although the rate increases vary according to the sectors, the regions, and if the fonts have experienced losses or not, the overall growth is in line with expectations that S&P had set.

Despite the natural disasters, of which the total cost amounted to more than us $ 300 billion (US$ billion) and insured losses of 130 billion US dollars according to the assessments of firms, the rate increases have been modest, has called Fitch. The firm added that the insured losses have had limited impact on the capital of reinsurers as they have been well shared between insurers, reinsurers and capital markets.

Diverse perspectives

The outlook for the reinsurance sector vary according to the firms. Fitch Ratings maintains his own negative and explains that this reflects the continued pressure on profits due to competitive pricing, capital alternative to low returns on investments.

For its part, S&P establishes its prospects for the next 12 months to be stable for the reinsurance sector and to the reinsurers. Taoufik Gharib, an analyst at S&P Global Ratings says that the » downward path of the price of reinsurance has stopped and has reached an inflection point in the underwriting cycle «, and points out that the trend was even positive.

Stability for renewals mid-year

Aon Benfield believes that the fundamental dynamic of the subscription for the round change mid-year will remain unchanged. The firm added that the underwriting capacities are intact for all sectors of the reinsurance and the management of capital activities for the biggest reinsurers will continue as planned.

Gold, S&P believes that the growth rate will continue for the rest of the year. These could surpass the two digits for the regions of Florida and Puerto Rico, which has experienced significant losses in 2017 and including the round of renewals to arrive in the first half of the year.

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