Moody’s Upgrades Global Reinsurers’ Outlook to Positive from Stable, Reports Reuters

By Carolyn Cohn

LONDON (Reuters) – Moody’s Ratings has upgraded its outlook on global reinsurers from stable to positive, citing increased rates, more stringent policies, and strong investment income among the reasons. This announcement was made in a statement on Tuesday.

Reinsurers, who provide insurance to insurance companies, have raised their rates and excluded certain types of business in recent years as a response to significant losses stemming from the COVID-19 pandemic, conflicts, and natural disasters.

Additionally, higher interest rates have contributed to improved investment income for reinsurers.

"We expect property reinsurance pricing to remain favorable," stated Brandan Holmes, a senior credit officer at Moody’s. He also noted that “solid balance sheets will help reinsurers withstand potentially high catastrophe losses.”

Despite these positive indicators, reinsurance buyers anticipate that price increases for property reinsurance may slow next year following several years of substantial hikes, according to Moody’s annual survey of global property and casualty reinsurers.

Reinsurers will convene for their annual conference in Monte Carlo next week to negotiate deals with insurers for the critical January 1 renewal date.

Furthermore, S&P Global announced on Tuesday that it is maintaining a stable outlook for global reinsurers. The global reinsurance industry managed to meet its cost of capital in 2023 for the first time in four years, and the ratings agency expects this trend to continue through 2024 and 2025.