Greg Reisner

In a recent edition of First Monday series, A.M. Best’s Managing Senior Financial Analyst Greg Reisner discusses the rationale for the rating agency’s “Negative” outlook for the global Reinsurance sector.

According to Mr. Reisner, “We have the same three themes we have had for a while, pressure on rates….low yield environment and…earnings dependent upon loss reserve development…”  Earnings have been decent, according to Mr. Reisner, but this is due to “relatively benign CATS and …reserve development…If you stripped out reserve development, you are looking at an ROE more in the mid-single digits.”

Mr. Reisner says M&A activity has been picking up due to the soft market.   There has also been competitive pressure on the Bermuda marketplace, as it is primarily a Property CAT market, and “the Bermuda players are going to have to move quick…and position themselves to maintain the strong returns that they have delivered over the past several years.”

We’d like to thank A.M. Best for their contribution to our program.  If you’d like to see more of the First Monday Series, visit the A.M. Best website.

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