Several factors in the reinsurance marketplace point to continued moderate rate increases going forward, Swiss Re and Hannover Re stated as the annual Reinsurance Rendezvous kicked off in Monte Carlo.
Swiss Re states that competing factors are currently in play, pulling the rate environment in different directions. "On the one hand, lower interest rates and higher solvency requirements point to firmer pricing; while low inflation rates, reserve releases and excess capital speak for lower prices," the reinsurer says in a statement.
Swiss Re CEO of Reinsurance Christian Mumenthaler says the factors driving increases will likely win out in the near future: "Upward pressure on prices for reinsurance is likely to rise as low interest rates continue to depress running yields and drag return-on-equity levels down. Significant reserve releases will not go on forever, and solvency rules are tightening all over the world."
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