Wednesday, May 18, 2022
HomeBusinessGlobal Reinsurance Rates Trouble Insurers: Survey | India Business News

Global Reinsurance Rates Trouble Insurers: Survey | India Business News

MUMBAI: One of the Indian insurance industry’s biggest fears is the lack of adequate international support as the market shifts to a ‘hard cycle’ and consequently may not have enough capital to provide cover.
A survey of CEOs and business heads in insurance companies by the Insurance Institute of India revealed that 30% of the respondents expected exponential growth in demand for insurance post-pandemic. The remaining 70% expected growth to revert to the earlier trend.
While most industry players saw demand, they feared that the sector faced technology risks and also pricing risks to some extent.
About 41% respondents felt that inadequate reinsurance support due to a hard market cycle was a top risk, while 35% felt that capital shortage was a risk.
The reinsurance industry is characterised by ‘hard’ and ‘soft’ cycles. Historically, the cycles were driven by the availability of capital and the returns provided by financial markets. The reinsurance industry has been in a hard cycle since 2018. The hard rates have had their impact on domestic providers with many of them revising their property insurance rates. In the last two years, the impact of global hardening was felt in the life insurance market as well with many domestic insurers hiking their term policy rates.
According to industry experts, the hardening cycle has continued as there was been a risk aversion triggered by the volatility in global capital markets and the Ukraine war has added to the uncertainty. Last month, ratings agency Fitch said in a report that hardening market conditions are diminishing and European reinsurers are well-positioned to absorb above-average catastrophe claims. However, it warned about volatile investment returns.




Source link

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular

Recent Comments

%d bloggers like this: