Best’s Market Segment Report: AM Best Maintains Global Reinsurance Outlook at Stable Despite COVID-19 Volatility

OLDWICK, N.J.--()--AM Best is maintaining its market segment outlook for the global reinsurance industry at stable despite the volatility and uncertainty created by the COVID-19 virus outbreak.

Global reinsurers remain well-capitalized and the industry remains resilient, with a long history of innovative and prudent risk management. AM Best expects any covered losses to be manageable and that relevant policy exclusions will hold up. A new Best’s Market Segment Report, titled, “Market Segment Outlook: Global Reinsurance,” states that the stable outlook primarily reflects the pricing environment in the non-life segment, which has stabilized and for the moment is providing positive momentum across a broadening spectrum of business classes. A stable market environment in the global life reinsurance segment also is supporting the current outlook. Although the operating and competitive landscapes of the two major reinsurance business segments are distinct, the resulting diversification benefits the global reinsurance segment from an overall earnings perspective.

The report outlines other factors considered in the stable market segment outlook, including:

  • Robust risk-adjusted capitalization with significant excess capital in recent years, which has positioned reinsurers to absorb COVID-19-related underwriting losses and investment volatility;
  • The possibility that more-attractive opportunities emerge as the economy stabilizes once the COVID-19 crisis abates and constrains a new flow of third-party capital;
  • Greater discipline to generate underwriting profit commensurate with total return expectations, owing to pressure on interest rates, increased stock market volatility and global economic disruption;
  • The potential for an increase in demand from insurers that may have a constrained financial position as a result of the capital market volatility caused by COVID-19; and
  • Strongly capitalized life reinsurers with advanced modeling capabilities to handle a 1-in-200 year mortality event.

To access the full copy of the global reinsurance outlook market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=295996.

Separate market segment reports on the non-life and life reinsurance segments can be viewed at:

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

Scott Mangan
Associate Director
+1 908 439 2200, ext. 5593
scott.mangan@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Michael Porcelli, FSA
Director
+1 908 439 2200, ext. 5548
michael.porcelli@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

Contacts

Scott Mangan
Associate Director
+1 908 439 2200, ext. 5593
scott.mangan@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Michael Porcelli, FSA
Director
+1 908 439 2200, ext. 5548
michael.porcelli@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com