A.M. Best Co. Inc. said Tuesday in a report that it has revised its market segment outlook for the global reinsurance segment to positive from stable.
The ratings agency cited robust profit margins following a period of drastic repricing, higher attachment points, and tighter terms and conditions as key factors behind the move.
Underwriting discipline is being maintained even as reinsurance rate increases decelerate, and the segment remains well capitalized, Best said.
The global reinsurance segment generated positive underwriting results in 2023, with several reinsurers reporting combined ratios below 90.0.
Also, most reinsurers produced excellent returns on equity last year, in several cases exceeding 20%, Best said.
Meanwhile, increased natural catastrophe losses have helped keep demand for reinsurance coverage strong.
Strong underwriting results on property lines have helped blunt concerns about adverse reserve development on U.S. casualty books, Best said.
