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FOR IMMEDIATE RELEASE
OLDWICK - DECEMBER 06, 2018 08:00 AM (EST)
AM Best has revised its market segment outlook for the global reinsurance industry to stable from negative for 2019, citing factors stemming from a growing alignment between traditional and third-party capital among non-life reinsurers. A more-stabilized pricing environment—albeit at levels still below long-term adequacy—a rising interest rate environment, emerging growth opportunities and ongoing stability in the global life reinsurance segment also are factors in the outlook revision.
A new Best’s Market Segment Report, titled, “Market Segment Outlook: Global Reinsurance,” states that reinsurers rated by AM Best remain well-capitalized on a risk-adjusted basis despite significant catastrophe losses. In addition, excess capital in the non-life reinsurance market has provided companies the ability to take advantage of market opportunities and offer new products, invest in innovation and pursue mergers and acquisitions (M&A). AM Best is concerned that M&A can pose risks to a combined enterprise, as it can be utilized as a veil for ailing franchises. Still, M&A, if done prudently, should help improve the efficiency of the market’s overall capacity. Additionally, the excess capital continues to exert pressure on risk pricing and poses a drag on equity returns, but reinsurers that welcome alternative capital will thereby enhance their relevance with clients and investors and garner the ability to earn low-risk, fee-based income in the process.
The briefing outlines other factors that are driving the outlook revision, including as follows:
To access the full copy of the overall global reinsurance briefing, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=280739 .
Separate briefings on the non-life and life reinsurance segments can be viewed at:
• Global non-life: http://www3.ambest.com/bestweek/purchase.asp?record_code=280738 .
• Global life: http://www3.ambest.com/bestweek/purchase.asp?record_code=280740 .
For a video with AM Best Associate Director Scott Mangan about the global non-life reinsurance outlook, please visit http://www.ambest.com/v.asp?v=reinsuranceoutlook1218 .
AM Best rating analysts will take part in a webinar on Wednesday, Dec. 12, 2018, at 10 a.m. EST to discuss the factors behind the outlook revision to stable. To register for the complimentary event, please visit http://www3.ambest.com/conferences/events/EventRegister.aspx?event_id=WEB605 .
AM Best is a global rating agency and information provider with a unique focus on the insurance industry.