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Reinsurers to generate underwriting profits in 2023 —Best

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Reinsurers are expected to generate underwriting profits in 2023, despite persistent elevated claims activity, says AM Best in its ‘Market Segment Report, Global Reinsurers Face Challenges Even as Conditions Improve,’ published ahead of the Rendez-Vous de Septembre in Monte Carlo.

It noted that despite the prognosis, challenges persist for global reinsurers, as they face renewed pressures to meet their cost of capital and after inflation concerns during 2022 prompted reserve strengthening actions by some key players.

“AM Best’s stable outlook on the global reinsurance segment reflects a balancing act between positive and negative factors.

“Reinsurers generally have realigned their risk profiles and are in a strong position to generate the underwriting profits that had been elusive for a number of years. The current market appears to be one of the hardest experienced in decades.

“This cycle, however, is very different from previous ones. Price discovery has taken longer than expected. Claims patterns, as well as inflation and interest rate trends, have caught everyone by surprise. Optimism stemming from steep price increases and tighter terms and conditions is counterbalanced by an uncertain environment due to underwriting, economic and geopolitical factors,” the report stated.

 

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