MT TL Rotating 4 10 2018
Follow Us



Willis Re: 2017 to be Demanding Year for Reinsurers

Staff Writer | January 03, 2017

Despite the pressures the global reinsurance market is facing, the industry remains on track to close out another profitable year, meaning that pricing stabilization remains a major challenge for (re)insurers, according to the latest First View Renewals Report from Willis Re, the reinsurance division of Willis Towers Watson, the global advisory, broking and solutions company.

According to the report, while there are signs that reinsurers are not prepared to be as flexible as earlier years, many buyers have yet again managed to obtain improved terms. Key findings from the report include:

  • While sizeable reductions have been obtained on international business, in the U.S. there are signs of more stability, driven by the capital intensive nature of some U.S. classes and the very significant improvements in terms in recent years.
  • Capital markets have been active, leading to a further compression in margins, particularly on recent catastrophe bond issuances but also on a wider range of collateralized placements. Investor appetite continues to expand, most recently in motor, where issuers now have demonstrable access to alternative sources of capital. 
  • Reinsurers are taking a stronger client-centric approach to managing their portfolios in the current market; this is leading to superficially inconsistent underwriting at a market level and fragmentation of pricing trends by territory, class and client.
  • Greater clarity about the regulatory treatment of reinsurance solutions is helping to lift demand for Life and Non-Life reinsurance solutions.
  • The trend of M&A in the industry continues but the pace of consolidation has slowed when compared to 2015. With the uncertainties that consolidation brings, many buyers have been more cautious about severing relationships with longstanding reinsurance partners. 
  • Insurtech is emerging as a major market trend with supporters of disruptive insurtech solutions coming from capital markets as well as from major reinsurers seeking access to original risk.

“The ability to produce yet another profitable year, somewhat against the underlying pricing models, has meant that the threshold to force a market pricing stabilization has not yet been reached,” says John Cavanagh, global CEO of Willis Re. “While reinsurers are still able to report profitable results, despite the underlying issues they face, the situation for many primary companies is much tougher. Rising combined ratios in many markets, driven by competition both from existing peers as well as from new style competitors utilizing innovative low cost distribution and cost models, is a growing concern."

Featured articles

Guidewire Feb 2018 MR

MT 4 10 2018 Large RHS


The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.


ITA is pleased to present the 2014 Webinar Series. We have many topics for you to choose from and attendance is open to all ITA members. The webinar topics are current and exciting — ranging from predictive analytics to telematics and will focus on the direction insurance carriers need to follow for the future. All webinars are presented by insurance IT professionals along with some of the leading analysts and consultants in the field. There is no cost to attend an ITA webinar. For more information and to register for the webinar, click the “title” of the webinar below.


only online

Only Online Archive

ITA Pro Buyers' Guide

Vendor Views

Partner News