Analysts Debate: Are Insurers, Reinsurers Too Risk Averse?

September 2, 2014 by Susanne Sclafane

Have property/casualty insurers and reinsurers forgotten what they’re in business to do?Executive SummaryCapital itself is not the problem. It’s like guns. It’s what you do with the capital that’s the problem.” The surprising analogy came from Matthew Mosher, senior vice president of rating services for A.M. Best Company, during an industry forum in January.

Executive Summary

Capital itself is not the problem. It's like guns. It's what you do with the capital that's the problem." The surprising analogy came from Matthew Mosher, senior vice president of rating services for A.M. Best Company, during an industry forum in January. At a recent reinsurance seminar, Mosher joined analysts Meyer Shields of Keefe, Bruyette & Woods and Alan Zimmermann of Assured Research in a lively debate about whether the reinsurance market is overcapitalized or underrisked. Mosher and Zimmermann argue that there are some things reinsurers should be doing with their capital that they're not.

At a recent reinsurance seminar, Mosher joined analysts Meyer Shields of Keefe, Bruyette & Woods and Alan Zimmermann of Assured Research in a lively debate about whether the reinsurance market is overcapitalized or underrisked. Mosher and Zimmermann argue that there are some things reinsurers should be doing with their capital that they’re not.

That was one of the questions that three industry analysts debated during a recent reinsurance seminar, when one of them—a rating agency analyst—surprisingly suggested that companies could be taking on more risk.

During a panel discussion at the Casualty Actuarial Society’s Seminar on Reinsurance, moderator Raju Bohra, an executive vice president at Willis Re, kicked off the discussion when he asked how insurers and reinsurers are managing their excess capital.