While the reinsurance industry continues to operate in an extremely challenging environment, rating agencies affirm that many companies have responded well over the past year by making defensive moves to protect their competitive positions.

Executive Summary

Rating agencies Standard & Poor's, Moody's and A.M. Best continue to maintain negative outlooks on the global reinsurance sector. But they actually don't expect many downgrades of reinsurers in the next year and say that the rated companies are taking positive steps to protect their competitive positions.

“We continue to think that the reinsurers are operating in a very negative environment. The credit conditions for global reinsurers remain negative, and we haven’t seen much improvement in terms of market conditions over the last 12 months,” said Dennis Sugrue, director of Insurance Ratings at Standard & Poor’s. “Competition continues to be fierce, prices continue to decline, capital is at all-time highs. And we’re seeing a change in the way that people are buying reinsurance.”

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