A.M.BestTV: Global Reinsurers Contend With New Reality

OLDWICK, N.J.--(BUSINESS WIRE)-- This final episode of “First Monday” for September looks at the sweeping changes that are taking place in the global reinsurance market, as discussed by A.M. Best Vice President Robert DeRose and Senior Financial Analyst Mariza Costa. Click on http://www.ambest.com/v.asp?v=fmreinsurance915 to view the entire program.

“First Monday” is A.M. Best’s monthly program featuring commentary by the company's leading analysts.

Rapid changes within the reinsurance sector over the past few years are generating pressures on reinsurers. Low interest rates and diminished demand for reinsurance cover also are contributing to challenging market conditions.

“Due to the persistent competitive market environment, A.M. Best is maintaining its negative outlook on the reinsurance sector,” said DeRose. “However, some good news is margins are still reasonable, although not as robust as in the past, and most reinsurers with the capability of writing primary insurance have been able to reallocate their capacity to more attractive business segments.”

“Additionally, the yield environment is still difficult,” continued DeRose. “This environment combined with pressured underwriting margins is making it challenging for reinsurers to achieve anywhere near a double-digit return on equity, and yet, there is still relative profitability, owing to favorable reserve development and the benign catastrophe environment.”

“Going forward, A.M. Best sees the level of mergers and acquisitions continuing to grow,” said Costa. “Companies need to be more diversified and have a larger global footprint. A.M. Best anticipates that there will be a handful of very strong companies that are going to play globally and have a very strong financial position to compete in the current market environment.”

Recent episodes of A.M.BestTV include:

• U.S. Surplus Lines Sector Sees Merger and Acquisition Spurt: Senior Financial Analyst Robert Raber discusses how the U.S. surplus lines sector has become an attractive merger and acquisition target: http://www.ambest.com/v.asp?v=fmsurpluslines915.
• Competition Ramps Up in Canada Property/Casualty Industry: Senior Financial Analysts Jacqueline Lentz and Joel Silverthorn discuss some of the hot-button issues in the Canadian property/casualty market; such as, merger and acquisition activity, Ontario automobile rates and the overland flood coverage: http://www.ambest.com/v.asp?v=fmcanadapc915.
• Canada Life Writers Seek Out Growth Possibilities: A.M. Best Managing Senior Financial Analyst Richard McMillan and Senior Financial Analyst Edward Kohlberg explore growth strategies by Canadian life insurance writers amid the low interest rate environment: http://www.ambest.com/v.asp?v=fmcanadalife915.
• Surplus Lines Industry Adapts, Restructures and Networks: Preview of the upcoming National Association of Professional Surplus Lines Officers’ annual convention that is taking place from Sept. 9-11, in San Diego, CA: http://www.ambest.com/v.asp?v=surpluslines915.

A.M.BestTV covers exclusive A.M. Best information and reports, targeted topics and key developments in the (re)insurance industry every Monday, Wednesday and Friday. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html. View A.M.BestTV episodes at http://www.ambest.tv.

A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150910006616/en/

A.M. Best
Lee McDonald, 908-439-2200 ext. 5561
Group Vice President, Publication and News Services
[email protected]

Source: A.M. Best

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