Moody’s raises outlook on global reinsurers to positive

Moody’s Ratings raised on Tuesday its outlook for global reinsurers from stable to positive, citing increased pricing, more restrictive policies, and healthy investment income.

Reinsurers, who insure other insurers, have implemented significant rate hikes and reduced coverage in recent years to offset losses from the COVID-19 pandemic, conflicts, and natural disasters. Rising interest rates have also contributed to their improved investment income.

“We expect property reinsurance pricing to remain favourable,” Brandan Holmes, senior credit officer at Moody’s, said. “Solid balance sheets will help reinsurers withstand potentially high catastrophe losses.”

However, reinsurance buyers anticipate a slowdown in price increases next year after years of “significant” rate increases, according to a Moody’s annual survey of global property and casualty reinsurers.

As the annual reinsurance conference in Monte Carlo approaches, reinsurers will negotiate with insurers for the crucial January 1 renewal date.

S&P Global said on Tuesday it maintained its stable outlook for the global reinsurance industry, noting that it achieved its cost of capital in 2023 for the first time in four years and is expected to do so again in 2024 and 2025.

Attribution: Reuters