Despite the fact that mergers and acquisitions among primary insurers, new capacity, a softening market and bigger retentions are forcing U.S. reinsurers to work harder to retain accounts and attract new business, major players are vowing to hold the line in this renewal season, maintaining that in spite of such growth challenges, relaxing underwriting standards will not pay in the long term.
Patrick Mailloux, president and chief operating officer of Swiss Re Americas in Armonk, N.Y., said that in the wake of the hard market, large multinational primary insurers built up strong balance sheets. “We saw cession rates dropping,” he said. “They're keeping more of their business as opposed to reinsuring it.”
Even with the market softening, that trend has not changed, according to Mr. Mailloux. He said the stronger capital position of primary insurers allows them to take on more risk for fewer premium dollars.
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