Global: Outlook for global reinsurance industry remains positive
Source: Middle East Insurance Review | Dec 2024
Outlook for the global reinsurance segment is positive, underpinned by robust underwriting returns and the potential for solid full-year 2024 results despite an active Atlantic hurricane season, said AM Best in a market segment report, issued recently.
The report said that underwriting profit margins remain robust, despite 2H2024 losses from Hurricanes Milton and Helene. Full year 2024 is anticipated to be another solid year for the reinsurance industry.
Moreover, property rates and terms have been relatively stable and are unlikely to soften over the near term, owing to hurricane activity in 2024.
The reinsurance segment remains well capitalised, with no new players expected to disrupt current market discipline. Consolidations and flights to quality are more likely, said the report.
The rating agency added that demand for coverage remains strong and could possibly even grow, due to heightened natural catastrophe loss activity and general economic and political uncertainty.
Higher interest rate yields are beginning to earn out, increasing investment income and bolstering total returns. In addition, concerns about adverse reserve development in US casualty reserves have become a prominent discussion point for 2025 renewals, with continued adverse development causing many reinsurers to re-evaluate their positions.
The report said that life insurance remains a good source of diversification for the large global reinsurers. The global life/annuity and health reinsurance segments remain well-capitalised and positioned for robust growth. Claims stemming from elevated mortality have been manageable and more recently have levelled off, but pinpointing direct causes and future directions has been difficult. M