Capacity withdrawals where some reinsurers deem pricing to be inadequate is also evident. However, considerable pricing variation by class and territory persists. As yet, any indication of widespread pricing stabilization remains elusive.
“Any relief that pricing may be nearing the bottom of the cycle is counterbalanced by concern over how and when rates might start to increase, even modestly, on a wider basis. The alternative is a market that faces a number of years bumping along at current levels earning very modest returns.”
The Willis Re report also highlights that in the face of continued pricing and interest rate pressure, cost control measures remain a priority for many reinsurers.
“The drive to achieve market efficiencies and cost reductions is picking up pace, particularly in the
The report also notes that reinsurers are becoming acutely aware of the profound change that
Ultimately however, concern persists over how much longer prior year reserve releases can sustain reinsurers’ results and how differences in individual companies’ historic reserving practices will be exposed.
“In the current environment, the balance of risk retention versus return is more acute than ever. The ability of individual reinsurers to manage this crucial dynamic will have a profound impact on the shape of the market to emerge, if or when the rating environment finally offers some relief,” Cavanagh said.
Download the full report: The Willis Re 1st View report is a thrice yearly publication on market conditions at the key reinsurance renewals seasons. It includes specific commentary on key trends throughout the world's major reinsurance classes and regions.
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Laura Molloy: +44 20 3124 8555 | Laura.Molloy@willistowerswatson.com INVESTORS Matthew J. Rohrmann: +1 212 915 8180 | Matt.Rohrmann@willistowerswatson.com Aida Sukys: +1 703 258 8033 | Aida.Sukys@willistowerswatson.com