Market Overview

A.M. BestTV at Rendez-Vous: Reinsurance Outlook Remains Negative, But Opportunities Are Growing, A.M. Best Panel Says


In this A.M.BestTV episode from the 2018 Les Rendez-Vous de
Septembre (Rendez-Vous) conference in Monte Carlo, Monaco, a panel of A.M.
analysts said reinsurers still face profitability pressures,
but the increasing demand for insurance is providing growth
opportunities. Click on
to view the entire program.

Participating on the panel were Stefan Holzberger, senior managing
director and chief rating officer; Robert DeRose, senior director; and
Anthony Diodato, managing director.

All three discussed A.M. Best's market segment outlook on the
reinsurance market.

"Reinsurers are very well-capitalized and have the capacity to absorb
adversity, over the near term," said DeRose. "What really is dictating
A.M. Best's negative outlook is the operating and total performance of
the sector, which really has been under pressure for a number of years.
In order to attain and retain investors, you have to provide a
reasonable return. You need to have strong financial flexibility, which
comes from the investors. A.M. Best's concern has been and continues to
be on profitability and improving that profitability."

Holzberger highlighted some positive aspects of the market.

"A slow rise in interest rates will be a positive on investment income,
helping that bottom line," said Holzberger. "Economic growth in some of
the mature Western markets also has driven an increase in the underlying
demand for insurance, and the reinsurance sector is benefiting from that
as well. In addition, the significant catastrophe events from last year
have led to an increased demand for reinsurance."

Underscoring the importance of innovation, Diodato said, "Innovation is
not just ‘the new product,' but how a company becomes more efficient in
the way it acquires business and the way it processes business, because
that's going to be a deciding factor for many companies. … It is such a
key component to an organization distinguishing its self in the future,
whether it is a reinsurance or commercial one."

For full video coverage of the Rendez-Vous conference, including
exclusive executive interviews, visit

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