RBC: Combined ratios of specialty reinsurers will be too conservative

Canadian investment banking firm RBC Capital Markets LLC said the combined ratios of specialty reinsurers may be artificially low due to conservative reserving, rebuilding reserve buffers as well as higher investment returns which may offset weaker underwriting returns, Reinsurance News reported. Analyst at RBC said that large losses from events in New Zealand and Turkey and Syria disproportionately affected European reinsurers. Meanwhile, solvency positions within the insurance sector remain strong.