Alternative capital could be “more relevant than ever” in the global reinsurance industry and has a chance to grow, at a time when reinsurers are looking to manage their volatility more tightly and pulling-back in some quarters such as catastrophe risks, according to S&P Global Ratings.
In updating its analysis of the global reinsurance sector, S&P said that its view of the sector remains negative, but it does believe the industry may be turning a corner on profitability, with better earnings and underwriting profits expected.
But the rating agency sees a continuing and also strengthening role for alternative capital markets in reinsurance, with opportunities likely to abound for the insurance-linked securities (ILS) market as a result.
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