From: Insurance Business
Industry plagued with difficulties, it is suggested
The reinsurance industry is currently experiencing a hard market, generating risk-adjusted returns not seen since 1993, according to a report by AM Best.
This cyclical shift, often triggered by significant underwriting losses and surplus erosion, has improved prospects for many reinsurers. Typically, a large-scale loss initiates the transition from soft to hard pricing cycles, attracting investors eager to benefit from hardening underwriting conditions and resulting in the formation of startup reinsurers.
According to insights from the credit agency, these new entities often merge or are acquired as the market eventually softens and supply-demand equilibrium is restored.
