Market Research Reports - Ken Research Reinsurance in the UK Key Trends and Opportunities

Terrorism, Cyber-Risk and Telematics Demand for New Reinsurance Policies in UK
Reinsurance in the UK consists of written premium, reinsurance ceded and reinsurance
policies. The major factors affecting the reinsurance in the UK are the country’s economy,
demographics, natural hazards, man-made hazards and their impact on the insurance industry.
In the year 2017 March, the terrorism reinsurance fund Pool Re has announced plans to
extend its cover to risks related to cyber-attacks on property. The non-profit flood reinsurance
fund, Flood Re, is active. With the growth of cyber-risk and telematics, demand for bulk
annuity reinsurance contracts and implementation of Solvency II in UK are expected to
support the growth of reinsurance segment over the coming years.
It was observed that the global reinsurance market has faced losses due to rise in natural
disasters in the yesteryears. The global reinsurers sector has extremely strong capital
adequacy and will continue to provide support but few reinsurers are more exposed and
sensitive to risk. Even though the prices are continuing to lower across all lines of business
and global property prices were low during renewals, the reinsurance sector has faced losses.
The exposure to catastrophe risk is an additional pressure point on reinsurance profitability,
and reinsures are overexposed who might see deterioration of their insurance over the time.
According to the research report “Reinsurance in the UK, Key Trends and Opportunities to
2020“, it was observed that the reinsurance capital is growing from the past years and will
witness a strong growth over the coming years. There is an overall demand for reinsurance
industry, but the growth is limited to only few regions and lines of business. With the new
rules and regulations in the reinsurance sector the consumers are looking forward for new
insurances. Consumers are encouraging new investments in innovative insurer technologies
in both organic and inorganic forms. However, macro catastrophe loss impacts on the
reinsurance market is combine with higher contribution in loss activity from perils like severe
convective storm, flood, and fire that typically result in lower ceded losses. The increase in
the potential interest rate could indicate potential capacity restrictions in the reinsurance
sector.
The global reinsurance market status and outlook clearly defines the angles of players,
regions, product and end application/industries. The global leading reinsurance players are
divided based on the reinsurance market by product and application. Asia-Pacific occupies
the major share of the reinsurance market over the coming years with China leading followed
by India and Southeast Asia regions. The leading reinsurance competitors in global market
are Munich Re, Swiss Re-insurance Company, Hannover Re, SCOR, Reinsurance Group of
America, XL Group Plc, PartnerRe Ltd., Everest Reinsurance (Bermuda), Ltd. , Catlin Group
Limited, Korean Reinsurance Co, Berkshire Hathaway Cooperation, Lloyd’s of London,
HDI-Gerling, AXA, and Allianz, China Reinsurance Company.
Retrocession is a process of one reinsurance company serving another company by providing
services. This is carried out by accepting business that the other organization had agreed to. It
was observed that in UK there is a high reliance on retrocession in the past years that has
clearly contributed to a decline in the reinsurance market in the UK. Reinsures are expected
to avoid the property catastrophe business in the next few years. These are the major factors
affecting the reinsurance market and will also help in creating new opportunities in the
reinsurance sector in the future.
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