(Bloomberg) — Global reinsurers face challenges including increased competition and shrinking demand, following a "miraculous year," A.M. Best said.
"New capital continues to enter the reinsurance market," the ratings firm said in a report today. "This situation is exacerbated by primary insurers continuing to increase retentions. Given the major adversity overcome to produce a very respectable profit, 2013 was a miraculous year for reinsurers."
The rates reinsurers charge customers are under pressure as low interest rates drive the $30 trillion pension fund industry to their market. Below-average catastrophe claims have also left the industry with abundant funds. Reinsurers help primary insurers shoulder risks in exchange for premiums.
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