“What we’ve seen from Berkshire Hathaway is that they recognize that reinsurance opportunities are not where they need to be from a pricing perspective,”
DeRose noted that Berkshire Hathaway is specifically building out that capacity through
These developments and others help illustrate a major challenge for reinsurers amid competitive market conditions, which include robust capacity and ongoing low investment yields — identifying a sweet spot at which relevance and innovation co-exist and help a company thrive.
“There have been a lot innovative initiatives on the part of reinsurers to really try to round out their operations, find ways to have access to capacity and be well-positioned for the challenges that the market is currently providing,” DeRose said.
In addition to organic growth initiatives, mergers and acquisitions continued to play a role and underscored two noteworthy shifts in the Top 50 ranking. RenaissanceRe climbed six spots to No. 20, driven by the completion of its acquisition of Platinum. Arch moved up five places to No. 22, attributable to the consolidation of Watford Re into its operations.
Other highlights from this year’s report include:
- Alternative capacity continues to fuel strong price competition.
A.M. Bestcurrently estimates that alternative capital represents approximately USD 71 billionof capacity, roughly 20% of the total dedicated capacity of the reinsurance market.
- The global reinsurance report also includes A.M. Best’s analysis of hedge fund reinsurers and the alternative capital market, along with in-depth reviews of the Lloyd’s and life reinsurance markets, as well as geographic regions such as
Brazil, Asia/Pacificand Africa.
To access a copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=253443.
Copyright © 2016 by A.M. Best Rating Services, Inc. ALL RIGHTS RESERVED.
Assistant Vice President
Assistant Vice President, Public Relations
Senior Financial Analyst