Global reinsurers may be emerging from the economic crisis with relatively strong balance sheets and operating performance, but a number of issues may impact the sector’s ability to remain viable, such as a convergence of market pressures, low interest rates and tightening financial and market regulations.
According to a report issued by Standard & Poor’s Rating Services, life reinsurers in particular will face numerous challenges that may erode the health they’ve enjoyed. The report, "The Sluggish Economic Recovery and Emerging Regulatory Changes Are Reshaping The Life Reinsurance Landscape," maintains that a slow economy is forcing life reinsurers to deploy limited capital resources cautiously. "In addition, the uncertain implications of emerging accounting and solvency standards around the globe for both direct companies and life reinsurers are keeping the industry from venturing too far from familiar, traditional risks," notes Standard Poor's credit analyst Robert Hafner.
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