A.M. BestTV: U.S. Life/Annuity Insurers Step Up Use of Reinsurance, Says Best Director

OLDWICK, N.J.--()--In this A.M.BestTV episode, William Pargeans, director, A.M. Best, reviews a new report that details how life and annuity insurers are using reinsurance for overall risk management, coverage of specific risks, supporting new products and more. Click on http://www.ambest.com/v.asp?v=laparjeans118 to view the entire program.

U.S. life/annuity insurers have increased the aggregate face amount of policies ceded to reinsurers to $28 trillion since 2006, an increase of 83%, according to a recent Best’s Special Report.

“Using reinsurance for risk management is certainly not a new concept; however, companies' enterprise risk management (ERM) programs have received a lot of attention in recent years,” said Pargeans.

Pargeans addressed the potential of counterparty risk to primary writers given the top-heavy nature of the life reinsurance market.

“Diversification is always something that is looked upon favorably. After a wave of consolidations, there are five primary life reinsurers that absorb about 80% of the business that is presented to the life reinsurance market, so the counterparty exposure is concentrated in these five players. Nevertheless, those five players are very highly rated by A.M. Best and that reduces the credit exposure to some degree,” he said.

To access the full copy of this special report, titled, “Consolidation Narrows Reinsurance Options Despite Greater Reinsurance Risk Appetite for L/A Insurers,” please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=269626.

Recent episodes of A.M.BestTV include:

  • How U.S. Tax Reform Will Affect Insurers: A.M. Best Senior Industry Research Analysts George Hansen and David Blades examine how the 2017 U.S. tax reform is set to impact a wide range of insurance areas, including reinsurance, reserves, long-tail lines and more: http://www.ambest.com/v.asp?v=taxreform118.
  • Record California Wildfire Season Puts Spotlight on Insurers: A.M. Best Financial Analyst Lewis DeLosa and Industry Analyst Bobby Skrabal examine the impact of recent catastrophic wildfires in California, including how these fires might affect insurance underwriting, modeling and reinsurance: http://www.ambest.com/v.asp?v=wildfires118.
  • Series Highlights Program Administration Industry: Taking It Slow on Tech But Moving Fast to Stay Ahead: Highlights from the most-recent survey research project by the Target Markets Program Administrators Association on the size and dynamics of the program business market:

Part one: http://www.ambest.com/v.asp?v=tmpaapanel1118.
Part two: http://www.ambest.com/v.asp?v=tmpaapanel2118.
Part three: http://www.ambest.com/v.asp?v=tmpaapanel3118.

A.M.BestTV covers exclusive A.M. Best information and reports, targeted topics and key developments in the (re)insurance industry every Monday, Wednesday and Friday. 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 the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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

Contacts

A.M. Best
Lee McDonald, +1 908 439 2200, ext. 5561
Group Vice President, Publication and News Services
lee.mcdonald@ambest.com

Contacts

A.M. Best
Lee McDonald, +1 908 439 2200, ext. 5561
Group Vice President, Publication and News Services
lee.mcdonald@ambest.com