The Atlantic hurricane season ended without a major hurricane and with the fewest named hurricanes since 1982. That will lead to a low double-digit decline in related catastrophe reinsurance pricing in the 2014 renewals, according to Fitch Ratings.
Insurance industry earnings for the year likely will be higher, attributable to lower catastrophe payouts, but much of the extra profit likely would be paid to investors through dividends and share buybacks rather used to increase capital, Fitch said. As a result, this will add to downward pressure on U.S. excess-of-loss catastrophe pricing, which has been weakened due to surplus capacity from the growth of catastrophe bonds and other reinsurance alternatives, Fitch said.
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