The reinsurance market continues to face a number of challenges that are forcing changes to their business models and how they are organised. These include:
- The current low interest rate environment
- The changing face of regulation
- The influx of new capital and competition leading to some elements of excess capacity.
While 2013 was a relatively benign year for the industry, due to the absence of major catastrophes and the availability of surplus from prior years’ reserves, the outlook is deteriorating as rates decline in key areas and external pressure from competitors and regulators increase. Companies are responding with many different business models reflecting their agility and appetite for change. Winners and losers will emerge as the environment drives the evolution of new forms of capital, better use of data, improved risk management and increased focus on areas of potential growth.