A.M. BestTV at Rendez-Vous: Reinsurance Outlook Remains Negative, but With Possible Upsides, Say A.M. Best Leading Analysts

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OLDWICK - SEPTEMBER 13, 2017 03:14 PM (EDT)
In this ^A.M.BestTV episode at the annual Rendez-Vous de Septembre (Rendez-Vous) conference in Monte Carlo, Monaco, Stefan Holzberger, senior managing director and chief rating officer, and Greg Carter, managing director, analytics, A.M. Best, reviewed the outlook for the reinsurance sector and how recent catastrophes could affect the market. Click on http://www.ambest.com/v.asp?v=rvs3917 to view the entire program.

“The negative outlook is really an indication of where A.M. Best believes ratings are going to migrate over the next 12 to 36 months,” said Holzberger. “The negative outlook that A.M. Best has had on the reinsurance sector for a number of years, is being driven by the issues that are prevalent here at Rendez-Vous: the low-rate environment, expanding terms and conditions, reducing reserve releases and the abundance of capital in the industry. These factors are really putting a strain on opportunities, especially growth opportunities, as well as the whole pricing dynamic.”

Carter spoke about how the top 10 reinsurers have consolidated their positions in the reinsurance market.

“These reinsurers have weathered scale, diversification, capital and performance better than the smaller players. If anything, these companies have expanded their positions and entrenchment in many markets. To have come through pretty tough market conditions over the last six to eight years and maintained strong capital positions and good earnings really takes them away from that negative outlook.”

Concerning Hurricane Irma, Holzberger and Carter agree that if it had taken a different path, and became a $100 billion or $150 billion insured loss event, the industry might have seen a rationalization in terms of the pricing dynamic in the market and some hardening across the market for reinsurance.

For full video coverage of the Rendez-Vous conference, including exclusive executive interviews, visit http://www.ambest.tv/rvs17 .

Recent episodes of ^A.M.BestTV include:

• Rendez-Vous: Global Reinsurers See More Than Catastrophe Risk on Horizon: Reinsurers and related professionals gathered at the annual Rendez-Vous de Septembre conference say risks such as mortgage and cyber are capturing industry attention: http://www.ambest.com/v.asp?v=rvs1917 .


• Surplus Lines Pricing Encounters the Market’s ‘Rocky Bottom’: Indications show accelerating growth for the excess and surplus sector, driven by a growing economy, shifting energy sector and pricing trends that may prove to be unsustainably low: http://www.ambest.com/v.asp?v=wsiapanelrecut917 .


• Fewer Bright Lines Separate Reinsurance From Third-Party Capital: A panel of rating, reinsurance and securities executives review the current state of the insurance-linked securities sector and how it’s changing global reinsurance markets: http://www.ambest.com/v.asp?v=ilspanelrecut917 .


• Facing Slim Returns, Reinsurers Look to New Sectors, Venues: A.M. Best analysts review highlights of a new report on the global reinsurance industry, including reinsurers’ growing interest in flood, cyber, terror and other coverages, along with their greater interest in emerging regions of the world: http://www.ambest.com/v.asp?v=globalrereport917 .

.^A.M.BestTV covers exclusive A.M. Best information and reports, targeted topics and key developments in the (re)insurance industry every Monday, Wednesday and Friday. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html . View ^A.M.BestTV episodes at http://www.ambest.tv.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.