Moody’s Upgrades Outlook for Global Reinsurers

By Carolyn Cohn
LONDON (Reuters) – Moody’s (NYSE:MCO) Ratings has upgraded its outlook on global reinsurers to positive from stable due to higher prices, more restrictive policies, and healthy investment income.

Reinsurers, which insure insurers, have increased their rates and excluded certain businesses in response to significant losses stemming from the COVID-19 pandemic, wars, and natural disasters. Additionally, rising interest rates have contributed to increased investment income for reinsurers.

Brandan Holmes, a senior credit officer at Moody’s, noted, “We expect property reinsurance pricing to remain favorable. Solid balance sheets will help reinsurers withstand potentially high catastrophe losses.”

Despite this positive outlook, a survey by Moody’s indicates that reinsurance buyers expect a slowdown in price hikes next year after several years of significant increases.

The annual conference for reinsurers is scheduled for next week in Monte Carlo, where they will negotiate deals with insurers for the crucial January 1 renewal date.

Meanwhile, S&P Global has maintained its stable outlook for global reinsurers, noting that the industry earned its cost of capital in 2023 for the first time in four years, with expectations for continued performance in 2024 and 2025.