The global reinsurance market is continuing to see price falls, according to S&P Global Ratings. The ratings agency said it generally believes that the continuing pricing decline in the global reinsurance market can be attributed to a continuation of trends it has observed in many renewal periods so far, namely an abundance of reinsurance capacity and many years of modest insured losses.
In a report titled, Déjà Vu All Over Again: Global Reinsurers Awake To Another Year Of Declining Rates, S&P Global Ratings said competitive pressures remain high as reinsurers continue to search for attractively priced risks. It noted that pricing has continued its downward trajectory, with market participants quickly absorbing any pockets of growth and isolated price strengthening.
“We are maintaining our stable outlook on the reinsurance sector, with its sophisticated enterprise risk management constructs, still-rational underwriting, and robust capital,” said S&P Global Ratings credit analyst Taoufik Gharib. “However, any aggressive growth through underpricing, especially in the softer lines, while providing cheap capacity to cedants, will likely trigger negative rating actions.”