Report: Reinsurers face big premium slide

|By:, SA News Editor

Following a 2013 in which the number of natural and man-made disasters fell by half, reinsurers could be hit with up to a 25% decline in premium revenue this year, according to broker Willis Re.

Combining with the lack of catastrophes is a market in oversupply as pension funds and hedge funds (like GLRE and TPRE) rush into the business - a $50B increase in industry capital, says Willis CEO John Cavanagh.

U.S. property casualty reinsurance faces the biggest hit - 10-25% - while European premiums could fall 10-15%.

Hannover Re (HVRRY) last week said it expected premiums to fall this year, fueling concern about a price war with competitors like Swiss Re (SSREY) and Berkshire Hathaway (BRK.A, BRK.B).

Among U.S. reinsurers: ACE, XL, PRE, RE, RNR.