The relatively mild hurricane seasons of the past two years and the lack of other catastrophic weather events has been largely responsible for the significant profits generated by reinsurers. Indications are the happy days of low losses and high profits are ending, as reinsurance premium rates are on the decline.
That’s good news for primary carriers, and also for policyholders – companies, governments, taxpayers, and individuals – for two reasons.
Declining premium rates mean primary insurers spend less on reinsurance. In turn, primary carriers’ profits increase, and/or they cut their policyholders’ premiums.
Insight, analysis & opinion from Joe Paduda