Multiyear hardening in reinsurance market may be ahead: Analysts

Reinsurance markets may be heading into a multiyear hardening with prices expected to increase “materially” at 2021 renewals, according to a report Monday from analysts at Jeffries Group LLC.

 

Multiyear rate rises may be possible as the industry is buffeted by a variety of issues.

 

Reinsurance industry earnings have been depressed for several years due to natural catastrophes, unusually high manmade losses and the pandemic, Jeffries said.

 

At the same, reinsurers are vexed by low interest rates and equity market volatility while also looking to boost reserves due to causes including the opioids crisis and social inflation.

 

Analysts said the hardening reinsurance market was similar to that of 2000-2001, when the market was hit by multiple challenges including the dot-com bubble, the aftermath of 9/11 and asbestos litigation.