Moody's: Life Reinsurers Face Pressure to Branch Out

U.S. life insurers are buying less reinsurance they were a decade ago, and that shift is putting pressure on life reinsurers, according to analysts at Moody’s Investors Service.

Life insurance sales have been soft, and life insurers reinsured only about 30% of their individual life business in 2010, down from about 61% in 2002, the analysts write in a new commentary.

Recurring life reinsurance production dropped 15% in 2010 and has been falling for 8 years, and that drop in demand has forced reinsurers to seek acquisitions, expand outside the United States, or expand in the United States outside traditional mortality business lines, the analysts say.