A Look at Pricing Trends in the Insurance and Reinsurance Industries
Despite the financial and economic turmoil of the last several years – both nationally and globally – the insurance market has remained remarkably stable. There have been surprisingly few insurance company failures, and premiums have remained at worst flat, and in most cases have seen year on year decreases.
As explained in a prior article I wrote, the soft market was largely the result of long term excess capacity in the market place – meaning insurers had to compete hard against each other to get clients’ business. Another factor was the reinsurance market – the mechanism by which insurance companies insure the risks they take on and spread risk to a much wider pool. For a number of years reinsurers have enjoyed relatively easy years, and have seen relatively few major catastrophic losses.
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