Risk has shifted from reinsurers to primaries: Moody’s

Reinsurers have succeeded in pulling away from frequency risks and settling into higher layers of reinsurance coverage, presumably putting paid to a long-running era of weak returns in contrast with primary insurers, analysts at  Moody’s believe. But further reinsurance pricing gains might still be squeezed out of an increasingly tight market.

“I would say that the industry has been fairly successful in terms of pushing themselves higher up in the programmes to cover truly large cat events and get out of frequency losses,” Laline Carvalho-Neff, Moody’s senior analyst in global reinsurance, said in the run-up to the Monte Carlo Rendez-Vous.

It may have done the trick. The sum of natural catastrophe events in the first half of 2023 might be the second-highest since 2011 from an insured loss perspective, but reinsurers are finding the impact “fairly benign” on their underwriting results, Carvalho-Neff told a pre-event webinar speaking in the context of the industry’s H1 financial results.