“The reinsurance market continues to be robust” according to Frank Nutter, CEO of the Reinsurance Association of America (RAA). Brokers report that capital in the market has increased, and it was a relatively “low catastrophe” year.

Among the concerns and challenges facing reinsurers, cyber exposure, the reauthorization of the Terrorism Risk Insurance Act (TRIA), and the retrocessional market. The industry had relied on alternative capital for the retro market, and there seems to be a “pause” in its development.  Cyber and terror insurance also provide opportunities for reinsurers, as does the development of the private flood insurance market. Wildfire presents an unforeseen threat to the industry, as does climate change. There is pressure to define how the industry itself is responding to the issue, while it also must refine its approach to underwriting the risk and support resilience initiatives.

Looking ahead, the RAA will be focused on the “covered agreement” between the U.S. and the EU, and the UK – once Brexit is finalized. It will require a change in all State law with respect to credit for reinsurance, the cornerstone of the value proposition for reinsurance. The RAA will also focus on risk transfer programs like the National Flood Insurance Program (NFIP), the Export-Import Bank, FannieMae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation), which are involved in Public-Private Partnerships with the reinsurance sector.

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