27.08.2015 – Der Druck auf die Preisgestaltung der Rückversicherer ist laut Fitch aufgrund der Marktentwicklung geringer geworden. So könnte durch die Preiskorrekturen auf dem Rückversicherungsmarkt “ein neues Gleichgewicht entstehen”, prognostiziert die Ratingagentur laut Artemis in ihrem jüngsten Branchenreport. Dennoch bleibt Fitch bei seinen pessimistischen Prognosen für die Rückversicherer: der negative Druck bleibe bestehen.
Reinsurance pricing has been pressured by inflows of new money from investors ranging from private equity, to pension funds, hedge funds and other investors in insurance-linked securities (ILS).
Fitch notes that the flow of alternative capital into reinsurance is slowing slightly, particularly from collateralized reinsurance. Fitch also notes that ILS pricing has stabilised, with a spread of around 100bps between the returns of ILS and high-yield bonds. Fitch says that it believes that “capital market investors may have a waning appetite for reinsurance risk.”
Perhaps it would be more accurate to say that investors and managers have a waning appetite for reinsurance risk at the very low pricing levels seen recently. Hence the attempts to establish a floor. In fact Fitch clarifies this in its report, saying: “capital market investors may have a lower future appetite for reinsurance risk.”
Fitch notes a deterioration in underwriting returns due to “a reduction in excess of loss property catastrophe business written by traditional reinsurers and an increase in casualty reinsurance.”
Combined ratios across the 22 reinsurers that Fitch tracks rose to 89,3 percent in the first-half of 2015, compared to 88,3 percent a year earlier. Fitch also notes a slowing in reserve releases, which as we’ve said before is something to watch, particularly if loss costs jumped dramatically and reserve releases are no longer able to bring the combined ratios back down to manageable levels.
Fitch also notes a shift towards quota share business, as excess of loss pricing hit the floor. Fitch explains why this can affect reinsurer results: “Quota share reinsurance business carries a higher, but less volatile, average loss ratio than excess of loss and property catastrophe business.” (vwh/td)