An insightful article from Artemis, efficiently summarising Munich Re's research.

Much of the pressure felt in the reinsurance industry has arisen as a result of alternative capital flooding the market, but it should be pointed out that a significant proportion of this capital focuses on natural disasters such as hurricanes, earthquakes, floods, etc.  With several years of relatively benign loss activity, pressure on pricing continues, and Reinsurers feel the pinch more and more at each renewal.

(Re)Insurers will ever continue to narrow the gap between economic losses and insured losses in an effort to provide more adequate protection to society, and to make best use of their expertise.

However, we are increasingly seeing a move towards alternative sources of income for Reinsurers, with the likes of Swiss Re looking to maximise the penetration of their specialist reinsurance products. One could argue that (notwithstanding the benefits to society of a benign catastrophe year), the reinsurance industry is benefiting by having to become more creative.