Analysts at Moody’s Ratings expect the alternative reinsurance capital space to continue to expand over the long-term, stating that much of the growth will come from reinsurers with additional growth expected from non-catastrophe risk, as the rating agency shifts its outlook on the global reinsurance sector to stable from positive.
Moody’s turned positive on the global reinsurance sector in September 2024, citing improved risk/return dynamics in the market. A year later, and the company has shifted its outlook back to stable, noting that pricing for property reinsurance is declining as the supply/demand balance shifts back toward buyers.
The ratings agency also highlights that the abundance of capital in the traditional reinsurance sector and capital inflows to alternative markets, notably cat bonds, are also driving prices lower.
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