Moody’s said survey respondents felt pricing would remain flat, or only rise moderately, during the course of next year.

Boardroom

Cedants are most concerned about the financial strength of reinsurers, according to a reinsurance buyers’ survey.

Reputation and claims paying record were the most important factors in cedants selecting a reinsurer, according to the Moody’s survey of big issues facing cedants.

The Moody’s report says: “This is unsurprising, given the significant natural catastrophe losses the reinsurance industry has absorbed over the past two years, as well as rising frequency of large man-made losses and claims inflation on some US liability lines.

“Recent payment and collateral release disputes between cedants and alternative capital counterparties, although isolated, have underlined the importance to cedants of longstanding reinsurance relationships, and of reinsurers’ history of prompt claim payments.”

Survey respondents felt pricing would remain flat, or only rise moderately, during the course of next year.

“This compares with an expectation of flat-to-lower pricing in last year’s survey, and reflects market participants’ reassessment of risk adjusted returns following substantial natural catastrophe claims in 2017 and 2018,” Moody’s says.

Cedants see no change in the amount of the alternative capital-backed reinsurance they use.

However, a small number of respondents plan additional reinsurance programmes in 2020, with the aim of limiting earnings volatility.

“…Growth will be dampened by meaningful adjustments cedants have made to reinsurance programs over the past two years.

“Almost 70% of cedants said they were somewhat likely to purchase additional aggregate cover. Demand for reinsuranc

Topics