29 August 2019 11:30
For the first time in ten years, the third-party investors (outside the industry of the [re]insurance) provided less capital over the last year. Losses records related to natural disasters of the past two years and a half are to blame for this decline, says the firm’s rating S&P Global Ratings.
According to data compiled by Aon, the assets under management in the sector of capital alternative were down 4 % on march 31 of 2019, compared to the end of the year 2018. These amount to 91 billion u.s. dollars.
The third-party investors risk-averse
The firm note as investors are skittish to invest in the market or to invest in securities related to insurance, ” which is not surprising “. It is that the increases in premiums expected after the losses of 2017 did not materialize during the round of election of 2018, says the firm.
Furthermore, some contracts are still affected by losses collateral related to the recent catastrophes, ” which should take two years to dissipate “. According to Aon, these amounted to approximately 15 billion us dollars.
“Despite a start to the year 2019 quite benign in terms of insured losses related to natural disasters, it is a different story for the components of the index. The main culprits for this are the risk of future losses and the losses of the obligations of disasters assessed at market value caused by the increase of the price of new emissions, ” says S&P.
The market will not fail to capital
Gold, S&P believes that the reinsurance market will not soon capital. In effect, the firm argues that the market has received new capital, albeit at a slower pace.
“We are also persuaded that the reinsurers will continue to incorporate the capital of third party investors into their strategies in order to help them to adapt to the challenges posed by a highly competitive environment,” write the authors of the report.
They also indicate that this type of capital will still play an important role in the competitive dynamics of the global reinsurance market and strengthen the capacities “.