Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

European reinsurers face market pressures after strong 2014

Reprints
European reinsurers face market pressures after strong 2014

Despite strong financial performance in 2014, European reinsurers face challenges going forward, A.M. Best Co. Inc. said in a new report Wednesday.

“The major European reinsurers have posted very strong full-year results for 2014 and continue to be well capitalized,” the ratings agency said in its report, “European Reinsurers Post Strong Performances but Growth Limited,” released Wednesday.

Underwriting results have been profitable for European reinsurers, said the report, owing to both the lack of large natural catastrophes as well as reserve releases.

Best goes on to point out, however, that “reinsurers face challenges as soft market conditions persist,” in an environment of limited organic growth potential.

The industry's reserve releases have also drawn attention, with Best commenting that “concerns mount regarding the sustainability of reserve releases.”

Reinsurers are moving to meet these challenges, said Best.

“They are attempting to expand into financial solutions, providing capital relief alternatives by financing new business to companies in jurisdictions where capital or reserving requirements are considered onerous,” the report said.

“Reinsurers are also expanding into emerging markets, with Asia and Latin America in particular considered to offer the most attractive opportunities, although low levels of insurance penetration represent a significant challenge,” continued Best in its report.

Despite these measures, however, Best sees continued market pressures threading through 2015 renewals.

“Reinsurance rates and terms and conditions are under competitive pressure from alternative capital, as evidenced by the Jan. 1 renewal period. In A.M. Best's opinion, further price reductions are likely. Traditional and alternative capacity remains plentiful, and a single large catastrophe is not expected to have a significant impact on current market conditions,” said Best.

Read Next