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Reinsurance inflection – Key question is whether irrational competition emerges: AM Best
['Steve Evans']
News on Catastrophe Bonds, Insurance Linked Securities (ILS) & Investments, Alternative Reinsurance Capital from Artemis.bm
With reinsurance capital across the market now at record levels, the rating agency says the key question is, “whether reinsurers can maintain underwriting discipline or will irrational competition emerge leading to another traditional soft market cycle.”
AM Best’s concerns related to market discipline extend further than just property catastrophe reinsurance, it stated in a new report today.
“Consequently, maintaining pricing discipline in casualty business may ultimately prove as important as preserving discipline within the property catastrophe market.”
Which is where discipline and reinsurer / protection buyer optionality may prove key, in reducing the pressure on key areas like property catastrophe risks.
Also read: Third-party reinsurance capital projected for 6% growth to $130bn in 2026: AM Best & GC.