Returns in the reinsurance market are still strong despite softening at recent renewals and this is driving some reinsurers to seek out growth while the opportunity remains, which analysts at J.P. Morgan call a rational view.
Traditional reinsurance firms have been building their reserve buffers through the hard market for just such an eventuality, a recent analyst report from J.P. Morgan implies.
The reserve buffers, that major reinsurance firms build through years where loss experience is relatively normal or benign, can be wielded to their advantage as margin compression begins during a softening phase of the market cycle.
The J.P. Morgan analysts acknowledge that, with the reinsurance cycle, it looks largely different since 2023.
