WRIN.tv speaks with Frank Nutter, President and CEO of the Reinsurance Association of America (RAA), about the state of the reinsurance market, capital growth, a US/EU covered agreement, and growth.
According to Mr. Nutter, the market remains highly competitive. Capacity and capital increased in 2016, which contributed to rates being flat to down – a good thing for buyers.
Capital remains a major challenge for reinsurers going into 2017. Aside from capital from reinsurers, capital continues to flow into the market from hedge funds, pension funds and other capital market players.
Looking internationally, Mr. Nutter says the “covered agreement” entered into by the U.S. and the EU is essentially a “trade agreement” preserves the regulatory systems in each country while allowing cross-border financial relationships between clients and reinsurers.
Growth in the reinsurance industry is “problematic.” Mr. Nutter believes the industry could benefit from an overall economic stimulus, the movement toward privatization of flood insurance and developments in cyber insurance.