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Confidence: results under pressure

In his report Global Reinsurance Highlights 2022, S&P Global Ratings paints a pessimistic picture of the global reinsurance industry due to economic slowdown, rising inflation, investment volatility, high number of natural disasters and climate change.

The rating agency notes that the industry is divided on climate change and natural disasters: half of reinsurers increased their exposure to these risks in 2022, while the other half reduced it. S&P also discusses the growing demand for cyber risk insurance and highlights the difficulty reinsurers have in convincing the market for investors in securitized insurance contracts to take on some of the risks.

In addition, the agency looks at underwriting results and its growth potential, as well as the impact of International Financial Reporting Standard 17 (IFRS 17) on its analyzes of the company’s solvency. Finally, it lists the world’s 40 largest reinsurers by net premiums written based on data from 152 reinsurers in more than 32 countries.

“Our outlook for the global reinsurance industry remains pessimistic, although we expect underwriting earnings to improve in 2022-23 in both non-life and life,” the report said. “It will continue to be difficult for reinsurers to maintain income above the cost of capital due to potentially increased risk of catastrophe losses, capital market volatility and high inflation in 2022 and 2023.”

that Insurance portal will soon publish three more articles on this S&P report.

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