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The economic environment for reinsurers was difficult heading into 2020, largely due to persistently low interest rates.
"We said in our renewal report that we thought there was going to be a tightening of reinsurance capacity as 2020 progressed," says Mike Van Slooten, head of business intelligence for Aon's Reinsurance Solutions business. "If your investment returns are under pressure and you've been taking a lot of losses, it's going to be very hard for you to cover your cost of capital, and that is going to provide an incentive to try to push pricing higher."
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