Lloyd's Reinsurance Pricing Supports Near-Term Profitability

Lloyd's reinsurance segment is expected to maintain adequate pricing and positive underwriting performance in the near term despite softening market conditions, according to a new AM Best report. 

The Best's Market Segment Report, "Steering Profitability Remains Crucial for Lloyd's in a Softening Market," examines Lloyd's as the broader global reinsurance industry prepares for the Rendez-Vous de Septembre in Monte Carlo. 

AM Best said performance oversight by the Lloyd's Corporation is expected to remain important as the market navigates a downturn in the underwriting cycle. The assessment comes as softening pressures create a more challenging pricing environment for reinsurers. 

"Over the longer term, the reinsurance segment's performance has experienced significant volatility, with its net loss ratio fluctuating over the past decade. However, this is not completely unexpected, as the reinsurance segment is highly exposed to catastrophe losses through lines such as property catastrophe excess of loss," Kanika Thukral, associate director of analytics and one of the report's authors, said. 

The report is part of AM Best's examination of the global reinsurance industry ahead of the annual Monte Carlo gathering. AM Best is also publishing its ranking of top global reinsurance groups and reports examining insurance-linked securities, life and annuity reinsurance, and regional reinsurance markets. 

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