Find out why Moody's Ratings upgraded its outlook on global reinsurers to positive and how it could impact the reinsurance industry moving forward.
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Moody's Ratings has upgraded its outlook on global reinsurers to positive from stable, citing higher prices and more restrictive policies, along with healthy investment income. The reinsurers, who insure the insurers, have raised their rates and excluded some business in response to losses from the COVID-19 pandemic, wars, and natural catastrophes. Additionally, higher interest rates have boosted reinsurers' investment income.
"We expect property reinsurance pricing to remain favourable," said Brandan Holmes, senior credit officer at Moody’s. "Solid balance sheets will help reinsurers withstand potentially high catastrophe losses."
While reinsurance buyers anticipate property reinsurance price hikes to slow next year after significant rate increases, S&P Global has retained its stable outlook for global reinsurers. The global reinsurance industry earned its cost of capital in 2023 for the first time in four years, and S&P Global expects this trend to continue in 2024 and 2025.
Reinsurers will convene for their annual conference in Monte Carlo next week to negotiate deals with insurers for the key Jan 1 renewal date.
Analysis: Moody's upgrade to positive outlook for global reinsurers signals a positive trend in the reinsurance industry, driven by higher prices, restrictive policies, and strong investment income. This could lead to more stability and resilience in the industry, benefiting both reinsurers and insurers. Staying informed about these developments can help individuals make informed decisions about their investments and insurance coverage.