Traditional reinsurers have taken "defensive actions" against alternative-capital competition, meaning the increased supply of capital created through insurance linked securities (ILS) is chasing slower growth in demand, especially in the U.S. Property Catastrophe insurance market, a new report says.
Willis Re, in its "1st View" July 1 renewals report, says that despite some losses, including $30 billion from Superstorm Sandy, reinsurers have not been willing to cede longstanding markets to capital investors.
Willis Re Global CEO John Cavanagh says besides cutting prices, some of the actions reinsurers have taken include "offering options such as multi-year agreements, extended hours clauses and additional reinstatements. Capacity for aggregate cover is also more widely available."
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