From: Captive Insurance Times

AM Best has revised its market segment outlook for the global reinsurance segment to ‘positive’ from ‘stable’, citing the robust profit margins along with higher attachment points and tighter terms and conditions that followed a period of drastic repricing.

According to the rating agency, despite decelerating reinsurance rate increases, underwriting discipline is maintained, and profit margins remain healthy enough to absorb higher loss activity than recently experienced.

Carlos Wong-Fupuy, senior director at AM Best, comments: “Demand for coverage remains strong due to heightened natural catastrophe loss activity and general economic uncertainty.

“We also considered the expectations of a slower reduction in interest rates than originally anticipated, which are likely to support strong returns in the short term.”