Willis’ Exec Sees Possible ‘Historic Change’ in Reinsurance Market

September 12, 2011

  • September 19, 2011 at 11:05 am
    An actuary says:
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    Interesting hypothesis. While there may be some truth to “advances in actuarial and natural catastrophe modeling techniques attracting longer-term capital market investors” driving the phenomenon, I’d suggest the more important factor is that the world is awash in cash. With short term rates near zero, long term rates at 2%, and stocks perpetually going nowhere, even a 5% rate of return looks pretty good these days. In that environment, there will always be investors willing to pump more money into the industry, and cash flow underwriting will look attractive to both insurers and reinsurers. A future hard market will happen, but not until economic growth starts to suck up some of the investment capital which is currently not being used productively.



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