Pressure on Lloyd’s Insurers and Reinsurers in 2015

13.01.2015 – lloydsLloyd’s and London players are set for a “tougher but manageable” year. The abundance of alternative reinsurance and insurance-linked securities (ILS) capital continues to impact pricing and distort the dynamics of the reinsurance space. Brokers feel companies need to be of a certain size in order to remain relevant, and increase value to products in the current challenging market.

Analysts claim that examples set by Lloyd’s companies regarding leading business positions ensures an element of relevance during tough times. “Lloyd’s companies hold many leading positions in their main classes of business, i.e. Energy business at Lancashire and Specialty lines at Beazley”, RBC Capital Markets said.

As brokers and RBC alike feel company size is vital in the battle to remain relevant, M&A and consolidation deals are potentially a way for smaller-medium sized organisations to stay in the game as News-Portal Artemis reports. While competition remains rife and shows no immediate sign of diminishing, an organisations efficiency and ability to provide low expenses could prove vital in the coming months, and the entirety of 2015. An emphasis on new, niche business lines could help to remain efficient.

RBC praises the rational market cycle shift away from senseless pricing, highlighting a welcomed move towards a focus on bottom line results, over top line growth. While RBC’s outlook on the reinsurance sector provides no surprises, it does stress that despite 2015 shaping up to be a difficult time for reinsurers globally, company efficiency and relevance is going to be increasingly key to survival. (vwh/mst)

Image: Lloyd´s

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