returns

The realistic or underlying return on equity (RoE) of a group of reinsurance firms tracked by Willis Re fell to 4.5% in the first-half of 2016, as higher natural catastrophe losses and ongoing competitive threats continue to erode reinsurer profits.

The results of many of the insurance and reinsurance industries leading players, over the first-half of 2016, show that one response to a challenging, competitive and softening market, is to try to spend your way out of it.

Based on a more typical catastrophe loss year reinsurers aggregate RoE for the full-year 2015 would decline to 3.4%, says Willis Re. Suggesting reduced profitability that leaves little room for firms’ to outmanoeuvre the persistent headwinds challenging the reinsurance sector.

The return on equity figures that reinsurance firm’s have been reporting recently have been artificially boosted by low levels of catastrophe losses as well as positive prior year reserve releases, according to a new report from broker Willis Re.

The pace of decline shown by insurance-linked securities and catastrophe bond premiums or rates has accelerated through the third-quarter of 2014, plunging to new lows, according to the latest analysis from ILS consultancy Lane Financial LLC.

The pace of decline shown by insurance-linked securities and catastrophe bond premiums or rates has continued to slow down in the first-quarter of 2014, according to the latest analysis from ILS consultancy Lane Financial LLC.

The return advantage provided by an investment in catastrophe bonds, over an investment in other forms of yielding debt instrument, has narrowed over the last two years, largely due to pricing pressure lowering yields on cat bonds more quickly.

The speed of insurance-linked securities and catastrophe bond rate declines slowed in the fourth-quarter of 2013, but still rates dropped to their lowest level since before hurricane Katrina struck, according to data from ILS consultancy Lane Financial LLC.

Despite the distinctly soft insurance-linked securities and catastrophe bond market, with prices having declined by as much as 40% on comparable issues in the last year, the insurance return from an ILS portfolio hit the second highest level ever in 2013.

The total return of the outstanding catastrophe bond market in 2013 has beaten the long-term average for the second year running, with the 2013 total return reaching a very healthy 10.9%, as measured by the Swiss Re Global Cat Bond Performance Total Return index.