Approximately $10 billion of new alternative capital has entered the reinsurance market during the year past, raising the amount of alternative capital in the industry to about $44 billion, according to a new report.
Moody’s Investor Service discloses this finding in the September 2013 edition of its “Global Reinsurance Outlook.” The report examines, among other trends, the macroeconomic environment for reinsurance, the influx of alternative capital, the profitability and interest rate outlook for reinsurers, and the market’s evolution.
The flow of capital to the reinsurance space is happening in a macroeconomic environment that Moody’s describes as “challenging, but manageable.” The credit ratings agency projects a U.S. GDP growth rate of about two percent in 2013 and 2.5 percent in 2014.