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TMCNet:  A.M. BestTV at Rendez-Vous: Reinsurance Outlook Remains Negative, But Opportunities Are Growing, A.M. Best Panel Says

[September 13, 2018]

A.M. BestTV at Rendez-Vous: Reinsurance Outlook Remains Negative, But Opportunities Are Growing, A.M. Best Panel Says

In this A.M.BestTV episode from the 2018 Les Rendez-Vous de Septembre (Rendez-Vous) conference in Monte Carlo, Monaco, a panel of A.M. Best analysts said reinsurers still face profitability pressures, but the increasing demand for insurance is providing growth opportunities. Click on http://www.ambest.com/v.asp?v=rvs4918 to view the entire program.

Participating on the panel were Stefan Holzberger, senior managing director and chief rating officer; Robert DeRose, senior director; and Anthony Diodato, managing director.

All three discussed A.M. Best's market segment outlook on the reinsurance market.

"Reinsurers are very well-capitalized and have the capacity to absorb adversity, over the near term," said DeRose. "What really is dictating A.M. Best's negative outlook is the operating and total performance of the sector, which really has been under pressure for a number of years. In order to attain and retain investors, you have to provide a reasonable return. You need to have strong financial flexibility, which comes from the investors. A.M. Best's concern has been and continues to be on profitability and improving that profitability."

Holzberger highlighted some positive aspects of the market.

"A slow rise in interest rates will be a positive on investment income, helping that bottom line," said Holzberger. "Economic growth in some of the mature Western markets also has driven an increase in the underlying demand for insurance, and the reinsurance sector is benefiting from that as well. In addition, the significant catastrophe events from last year have led to an increased demand for reinsurance."

Underscoring the importance of innovation, Diodato said, "Innovation is not just 'the new product,' but how a company becomes more efficient in the way it acquires business and the way it processes business, because that's going to be a deciding factor for many companies. … It is such a key component to an organization distinguishing its self in the future, whether it is a reinsurance or commercial one."

For fullvideo coverage of the Rendez-Vous conference, including exclusive executive interviews, visit http://www.ambest.tv/rvs18.

Recent episodes of A.M.BestTV include:

  • At Rendez-Vous: Insurers Still Lagging in Promoting and Paying Women, Panel Says: A panel of experts said the insurance industry continues to lag behind other industries in the percentage of senior management positions held by women: http://www.ambest.com/v.asp?v=rvs3918.
  • At Rendez-Vous: Expense Pressures and Technology Driving Distribution Evolution: A panel of experts said with brokers now underwriting, underwriters distributing insurance and reinsurers writing direct business, the distribution model is evolving: http://www.ambest.com/v.asp?v=rvs2918.
  • At Rendez-Vous: Reinsurers Race Against Whirlwind of Changes: Reinsurers and related professionals gather amid an evolving landscape and challenging market conditions: http://www.ambest.com/v.asp?v=rvs1918.
  • Glut of Reinsurance Capacity Constrains Post-Catastrophe Pricing, Say A.M. Best Analysts: DeRose and Associate Director Scott Mangan say disappointing reinsurance renewals in the wake of the 2017 catastrophes provided minimal pricing increases, leaving market dynamics relatively unchanged: http://www.ambest.com/v.asp?v=globalre918.

A.M.BestTV covers exclusive A.M. Best and insurance industry information and reports, targeted topics and key developments in the insurance, reinsurance and related sectors daily. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html. View A.M.BestTV episodes at http://www.ambest.tv.

A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.

Copyright © 2018 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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