Advertise
Resources
Member, Beacon International Group, Ltd.
Persistent competition among the largest publicly traded reinsurers suppressed organic premium growth during the first quarter, A.M. Best Co. Inc. said Wednesday.
The average stock price for the 16 largest publicly traded reinsurers, which include the European big four — Swiss Re Ltd., Munich Reinsurance Co., Scor S.E. and Hannover Re S.E. — rose 1.4% during the first quarter versus and average of 8.3% growth in the same period a year ago, Best said in an analysis.
Scor outpaced the group with a 24.7% quarterly stock-price increase, and hedge fund-backed reinsurer Greenlight Capital Re Ltd. began to recover from a turbulent 2015, which saw the company’s share price nosedive almost 43%, with a 16.5% first-quarter boost this year.
The report said reinsurers have dealt with compressed profit margins in recent years and pricing pressures, but have been aided by low catastrophe losses.
However, the Fort McMurray, Alberta, wildfire and other weather-related catastrophes have already generated more than $10 billion in insured losses so far this year, although the reinsured portion is still well within annual catastrophe budgets, Best said.
Global reinsurers’ portfolios are being weighted more toward more attractively prices primary business because of strong reinsurance competition, but pricing pressure also is mounting there, Best said.
With reinsurers’ balance sheet strength still strong and available capital remaining abundant, pricing will likely stay under pressure through this year, with broadening terms and conditions further pressuring results, according to the report.
Everest Re Group Ltd. named New York-based Marty Scherzer head of its structured solutions unit, Everest said in a Tuesday statement.