World life reinsurers probably will be assuming less business, and that contraction should be good for the market.
Laura Bazer, Joel Levine, and Robert Riegel, analysts at Moody’s Investors Service, New York, have included that observation in a new report on the global life reinsurance market.
Despite worries about perils such as avian influenza, life reinsurers are doing well, and their ratings are not under negative pressure, the analysts write.
At the moment, more pressing concerns include increasing industry concentration and increasing collateral requirements, the analysts observe.
In the United States, 5 reinsurers now handle about 80% of U.S. individual life business in force, the analysts write, citing figures from a May study conducted by Munich American Reassurance Corp. and the Society of Actuaries, Schaumburg, Ill.
Consolidation can help companies grow quickly and increase efficiency, but it also can make profits more volatile, the analysts write.