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FOR IMMEDIATE RELEASE
OLDWICK - APRIL 07, 2014 10:14 AM (EDT)
Given the major adversity overcome to produce a very respectable profit, 2013 was a miraculous year for reinsurers. The relatively benign level of catastrophes is of course the major driver, aided by what now seems an endless flow of favorable loss reserve development from prior accident years. It would be foolish, though, to gaze into the rearview mirror and lose sight of the difficult road that lies ahead, which may be far more treacherous. A.M. Best's forward view heavily weighs the various prospects that would tip the reinsurance industry's rating outlook to negative from stable. A revised outlook would reflect A.M. Best's view that reinsurance companies may face enough downward market pressure to cause an uptick in the number of negative outlooks or downgrades.
The increasingly competitive landscape emerged at the January renewal, spurred by the continuous flow of alternative capacity; increased retention among primary insurers; the narrowing of players on existing reinsurance programs; and excess capacity among traditional reinsurers fighting to hold existing positions. While competition was most pronounced on U.S. property catastrophe programs, the overflow of capacity to other business classes and regions exerted pressure across the board.
To access a copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=223136 .
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.