Weekly Global Insurance Analysis

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This week under review disclosed that Standard & Poor’s published two pre-Monte Carlo Rendezvous reports-one looking at the blurring boundaries between alternative and traditional reinsurance capital, and the other highlighting competition in reinsurance pricing.
Allianz Global Corporate & Specialty (AGCS) reviewed windstorm damage trends 10 years on from Hurricane Katrina, and Lloyd’s looked at insurance challenges around drones. Timetric reported on the UK professional indemnity market, and the Association of British Insurers (ABI) said there had been an increase in protection insurance payouts in 2014.
Insurance Europe commented on the EC consultation on European Market Infrastructure Regulation, and also expressed concern on the PRIIP technical discussion paper.
As Majesco launched its Business Analysis suite, so FICO announced a strategic partnership in South Africa to combat healthcare fraud.
Jelf Group revealed that it was in takeover discussions with Marsh, and Flood Re started “on boarding” to ensure industry participants were ready for its launch next April. AIG is to sell its remaining stake in AerCap, and Willis acquired in Western Australia.
In the UK, Admiral produced better than expected interim results, whilst Phoenix Group and Royal London impressed-the latter also expressed concern about the possibility of ISA-like taxation on pensions, and called for refinements in the Retirement Risk Warnings to improve customer decision making over pension funds. Arig and QBE revealed improved financials, and Lockton published a strong Annual Report. There were management appointments at Everest Re in the US, Capsicom Re strengthened its cyber team, and the new CEO at Suncorp is to take over from Patrick Snowball in October.
S&P’s new report reviews price competition in the reinsurance sector revealed global insurance outlook showed that price competition for global property/casualty reinsurers has been severe for the past few years. In a report published this week by the S&P’s Ratings Services says that it sees no signs of the trend reversing course in the near future as Property/Casualty Reinsurers With Strong Reserve Margins Are In A Better Position To Withstand The Prolonged Soft Market.
The rating agency added “Since the market started softening in 2007, we have observed that some global
reinsurers have supported their combined ratio by releasing more of their reserves.
Going forward, we expect a reduction of reserve releases attributable to natural catastrophe events, because there have been relatively few catastrophe claims in 2013 and 2014.
We expect those reinsurers that chose to retain prudent reserves for longer to have maintained a cushion on which they could draw. Those that released reserves more quickly, by contrast, may find that they have exhausted their ability to support current reported profits from past reserves.”


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