NU Online News Service, Sept. 9, 2003, 5:10 p.m. EDT – Consolidation in the world life reinsurance market should give the remaining life reinsurance players the clout they need to increase rates and improve their profits, according to Rodney Clark, a credit analyst at Standard & Poor’s Ratings Services, New York.
By 2004, the global market might consist of only six to eight “credible players,” Clark writes in a commentary on the global reinsurance market.
The fact that many primary life companies in the United States and Europe are ceding more than 70% of their new business to reinsurers should also help reinsurer profits, Clark says.
Clark predicts non-life reinsurers and other companies that could provide new competition will take at least two years to enter the market.
The top 10 life reinsurers wrote $29 billion in premiums in 2002, up from $23 billion in 2001, Clark says.