Pricing may have reached a turning point

According to panelists at the 2017 Bermuda Reinsurance Conference, the recent natural catastrophes have created what increasingly appears to be a capital event for the global reinsurance industry and pricing may have finally reached a turning point, Reinsurance News has reported.

Speaking at the event, S&P Global Ratings said that rating actions against companies with significant catastrophe-related losses will depend on a “reinsurer’s capital buffer for the rating, losses relative to expectations, as well as to peers’ and the overall market, its earnings power in the next couple of years, and management’s plan to replenish capital”.

Kevin O’Donnell, President and Chief Executive Officer of RenaissanceRe, said: “Either way, the industry may be evolving toward one with fewer radical price swings.

“I think we are moving to a more mature industry, and there will continue to be a secular shift toward efficiency and more stable margins.

“What we need to get to is some oscillation around a price that is the right price for the risk we are assuming.”

“I think there will be a combination of applying appropriate terms and conditions and appropriate pricing, either way, margins are higher or lower because of either pricing or terms and conditions.”

Source: willisgroupservices