A new report from insurance rating source A.M. Best finds that the global reinsurance market booked its second loss in 10 years in 2016; the other occurred in 2011.
The Best's Special Report, "Down But Not Out: Reinsurers Look to Reposition Amid Market Disruption," finds that the current market "appears to be operating amid malaise" and ended 2016 with an accident combined ratio of 101.0.
While some may say this is a conservative loss, the reality is that since 2013, the sector's combined ratios have continued to weaken, leading A.M. Best to change its outlook for the insurance sector to negative as far back as the summer of 2014. The report describes the return on equity for the last three years as "anemic," ending at 8% in 2016, or approximately five percentage points lower than 2013, with a dedicated reinsurance capacity at an estimated $420 billion.
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Patricia L. Harman
Patricia L. Harman is the editor-in-chief of Claims magazine, a contributing editor to PropertyCasualty360.com, and chairs the annual America's Claims Event (ACE), which focuses on providing claims professionals with cutting-edge education and networking opportunities. She covers auto, property & casualty, workers' compensation, fraud, risk and cybersecurity, and is a frequent speaker at insurance industry events. Contact her at [email protected]
