Swiss Re says reinsurance prices rising
SWISS Re, the world’s second-biggest reinsurer, yesterday said reinsurance prices were rising overall despite difficult times in the insurance market.
The reinsurer also said it was well positioned for the January 2010 renewals season.
“We are observing a broad upward trend in overall reinsurance pricing, although this varies significantly between different lines of business,” said Michel Lies, head of client markets.
The Zurich-based reinsurer says it is leaning more towards property reinsurance rather than casualty – which includes accident and medical liability claims – because pricing is improving in this area at a faster pace.
Lies was speaking ahead of the annual meeting of the reinsurance industry in Monte Carlo, where agents are debating which way reinsurance pricing will go.
Kepler analyst Fabrizio Croce said first indications from the conference were comforting.
“The broad upward trend in overall reinsurance pricing – although this varies significantly between lines of business – is unexpected good news,” he said in a note.
Swiss Re shares rose some 2.8 per cent yesterday, outperforming a 1.2 per cent rise in the DJ European insurance index
Reinsurers have been unable to push through the radically higher prices they promised last year for the risk cover they sell to their insurance company clients.
Lies added that, in spite of the economic crisis, the resilience of the property and casualty industry segment has helped Swiss Re stay on track.
“This has created a lot of goodwill and positioned us well for the upcoming January 2010 renewals,” he said.
Industry players had expected demand to surge in the wake of the financial crisis, as insurance companies sought to use reinsurance to protect their balance sheets as an alternative to raising fresh capital in volatile financial markets.
The effect was not as strong as reinsurers expected, however, and the recession has depressed insurance sales worldwide.
Industry leader Munich Re said the recession was pressuring spending on risk cover.