Seeking Alpha

Reinsurance pricing set for big fall

  • Following a hurricane season in which hurricanes were largely absent, property catastrophe reinsurance renewal prices are set to fall about 10% on Jan. 1, says SNL's Adam Cancryn, with prices for more U.S.-centric mid-year renewals likely to decline as much as 20%.
  • This will mark year #2 of deep cuts to reinsurance pricing - with a flood of new competition adding to the lack a natural disasters. "Unless you see some sort of massive change, it's not obvious what would change this environment that we've entered," says Sanford's Josh Stirling, and some analysts predict it will take $100B in industry losses to halt Y/Y rate-reductions.
  • For now, expect buybacks to continue, says Janney's Ryan Byrnes. "If you're a pure reinsurer, there's not much you can do with your capital right now, operationally."
  • A few sector names: ACGL, AHL, ALTE, ENH, MRH, PRE, PTP, RE, VR
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Comments (2)
  • bbro
    , contributor
    Comments (10526) | Send Message
     
    Past history of Hurricanes is not an indication of future performance...
    10 Dec 2013, 12:20 PM Reply Like
  • hilldoc
    , contributor
    Comment (1) | Send Message
     
    Hamburg Germany, Scotland and England just got socked by 100 MPH winds, a tidal surge not seen in 60 years and major flooding. See the stories on Cromer etc.
    10 Dec 2013, 05:58 PM Reply Like
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