Reinsurers are seeking to push into the primary insurance market ranging from life to property coverage to shore up growth, said Moody’s Investors Service.
“We expect more mergers and acquisitions,” Kevin Lee, a senior reinsurance analyst with Moody’s, said in an interview in Monte Carlo yesterday. “More companies want to diversify more into the primary insurance business,” especially retail insurance ranging from home to car coverage, he added.
Munich Re and Swiss Re Ltd. are among European reinsurers that already own so-called primary businesses, as an absence of costly disasters and increasing competition from new entrants squeeze earnings. Prices dropped this year at each of the policy renewal periods in January, April and July.
The drive for growth into primary business could encourage some companies to pay high prices, according to Lee.
“With the insurance industry doing a bit better right now, there aren’t so many sellers,” he said.
Reinsurers are meeting brokers and clients in Monte Carlo to negotiate next year’s property-and-casualty policies.