Archive for May, 2015

Large global reinsurance firms remain focused on buying up closed blocks or books of life and health insurance business, believing that by pooling the underlying assets and managing the legacy claims they can make the books perform better than those who wrote the business.

Pressure on reinsurance and retrocession pricing is likely to persist through the rest of 2015 and beyond, as alternative capital continues to expand within the market and market-moving loss events remain absent, according to A.M. Best.

One area where reinsurance companies undergoing mergers or acquisitions (M&A) can expect to find savings and cost efficiencies, is through their ceded reinsurance purchases. Case in point, XL Catlin said yesterday it hopes to save $50m on its reinsurance costs.

The flooding that struck the Texas and Oklahoma regions in the last week is an ongoing event, meaning that estimates of the insurance industry loss are not yet available. However some insights into the costs are emerging.

New longevity assumptions that increase the life expectancies for pension plan cohort members, which ultimately increase pension plan accounting liabilities, will not affect the cost of insurance and reinsurance capacity for longevity risk transfer, according to Prudential.

Catastrophe and hazard risk modelling company JBA Risk Management today launched its first catastrophe risk modelling platform, JCalf 15, featuring multi-peril probabilistic models and is relevant to both reinsurance and ILS users.

The competitive conditions in the insurance and reinsurance market is making achieving profitable growth hard, according to Arch Capital Group’s CEO Dinos Iordanou, as the firm reported growth in insurance was offset be declining reinsurance underwriting.

While the ongoing wave of mergers and acquisitions (M&A) in the reinsurance sector will reduce the number of companies active in the market, it is unlikely to lead to a reduction in competition, as non-traditional capital sources abound.

Despite rates in the global reinsurance market falling over the last couple of years, investors continue to show increased interest in reinsurance and insurance-linked securities (ILS) as a diversifying asset class, according to Towers Watson.

Louisiana Citizens Property Insurance achieved attractive savings at its reinsurance renewal thanks to strong investor support for its $100m Pelican III Re Ltd. (Series 2015-1), the insurers third catastrophe bond transaction.