Insurers may fare worse in stress tests due to hardening reinsurance pricing

The U.K.'s Prudential Regulation Authority has warned that general insurers may fare worse in their stress tests as hardening reinsurance and retrocession pricing will likely drive more retained losses, Artemis reported. Insurers in the U.K. have a material dependency on reinsurance and ceded more risk than they retain under the stressed scenarios, which is in line with historic trends of reinsurance protection strategies, to manage low frequency high severity loss potentials.