Swiss Re: Rate increases imminent

Swiss Re expects further rate increases for loss-affected and underperforming businesses and broadly stable rates in other areas, amid continued capital abundance in the reinsurance market. A report by the organisation suggests that further rate increases are needed to ensure a long-term sustainable reinsurance market.

Swiss Re’s CEO for reinsurance, Moses Ojeisekhoba said: “The industry is changing for a variety of reasons. We are confident that, with our continued focus on the needs of our clients, the scale and diversification of our business, and our risk knowledge and R&D capabilities, we are in the right strategic position to address change proactively.”

Edouard Schmid, chairman Swiss Re Institute and group chief underwriting officer, said: “The recent experience of hardening rates in reinsurance mainly reflects the response to higher loss occurrences and adverse trends in natural catastrophe markets and other affected segments. Our deep knowledge, experience and diversification make Swiss Re a strong partner for our clients in underwriting natural catastrophe risks while generating attractive returns on capital.”

The abundance of capital in the reinsurance market has impacted the entire reinsurance value chain, increased cost sensitivity, and is requiring reinsurers to find new ways of creating value for primary insurers.