Reinsurers benefit from improved investments, calm hurricane season

The U.S. and Bermuda reinsurance markets are seeing a disciplined January renewal season despite the recession, according to BestWire.
Reinsurers are benefiting from both an improved investment market and a quiet hurricane season, BestWire reported.
Unless a ceded portfolio had experience a loss, most reinsurers noted they were seeing stable premium rates, terms and conditions.
Any line with “financial institution” in the name was seeing moderate rate increases, Pina Albo, president of Munich Re America’s reinsurance operations, told BestWire.
James Few, managing director at Aspen Re and chief underwriting officer at Aspen Bermuda, told BestWire that the market is likely to experience some pressure on peak zone rates, but overall remains stable.
Businesses are purchasing less commercial insurance due to the recession. Additionally, in economic downturns, companies might cut back spending on risk management that can, according to Few, lead to an increase in losses.
Improved financial markets have strengthened the bottom lines of reinsurers, Chris Klein, head of business intelligence for Guy Carpenter, told BestWire.
“The key factor has been the recovery of asset values,” Klein said. “The stock market reached its low point in March, and we’ve seen a phenomenal increase since then. We have seen companies recovering by basically doing nothing. And we have not had any substantial catastrophe losses [that could] cause market-changing amounts of damage.”