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And a much longer hardly sustainable levelTheir open political space on other foldersoriented rising or falling markets volatilityThe titles of the two banks have rebounded wellTheir analysis was different just a year agoGermany an Organic Valley is building near DresdenIt should also move forward on two pointsThe unsuccessful will be many including in the ranks of the French banksThus despite the urgent appeals of George wIt is time to put an end to schizophreniaAs every year at the same time, Monaco will be stormed this weekend. PAS Grand Prix or wedding's on the horizon, but the traditional appointment of September (RVS), which mark the kick-off of the tariff negotiations for 2009 between insurers and their reinsurers. Hurricane Gustav was almost spice up the 2008 Edition. Finally, this event is expected to remain largely "digestible", first estimates building on insured damage less than $ 10 billion, or 10 of the Katrina-Rita-Wilma of 2005 trio. Cyclone season is that start Hanna must reach this weekend the American shores , the game remains widely open.
At this close reserve, most of the stakeholders to the SVR (reinsurers, insurers, brokers) anticipate serene discussions, if not concluding. "Little big policy issues will be debated this year in Monte Carlo." "Remaining tariffs to January 1, 2009, on which I am afraid that it does start agree that late", said Daniel Fortuit, Chairman of the Committee assignments of reinsurance of the FFSA and Director of the reinsurance of AGF.
From the top of cycle in 2006, the problem is little almost the same. Capabilities (reconstructed after Katrina) reinsurance abundant, yet solid results despite the financial crisis and a rather low loss experience grow mechanically, in a very competitive market, tariff reductions. Remains that the deterioration of the macroeconomic environment is a real threat: loss experience traditionally increases in times of recession and inflation posed a risk on the pricing of risk. Round-up in a few major issues.
Is the financial strength of reinsurers threatened by the financial crisis Not a priori. If relying on analyses of the rating agencies, reinsurers are correctly capitalised, and their profitability remains correct, even if it has deteriorated in the first half. According to Fitch, the sector (expressed in dollars) equity accuse an average decline of 3.8 between June 30, 2008 and December 31, 2007. The decline is more pronounced among European reinsurers ( 6.6), whose portfolios are more invested in shares. Not be alarmed, as, with the exception of Swiss Re, reinsurers are less affected by the crisis than the insurers. "Budgets are healthy: this is an element of stability, but also a risk factor, because this can exacerbate tariff competition", nuance Yann Le Pallec, responsible for insurance Europe of S & P. Reinsurers may still seek to pass on the ceding the impact of the financial crisis... "I hope that it would hold up technical considerations: we do not have to pay for the decline in financial results", said Daniel Fortuit.
Can the reinsurance prices still down Yes, but in lower proportions. In the absence of big disaster disaster, it seems clear that the downward cycle in force since 2006 has not been completed. So far, prevented the broker Aon, "anticipate an overall decrease of 10 to 15, in line with the renewals of July in the United States, appears optimistic". "Other than on some branches such as natural disasters or terrorism, we are building on a stability", indicates an insurer. In fact, the reinsurers will do everything possible to limit the decline. Do it by arguing that the price of their surrender (their own reinsurance) again on the rise. In total, "the potential of declining rates for renewals of 2009 is less than half what it was for those 2008", said Jean-Michel Gey, Director of reinsurance broker Marsh in France. Is, in brief, a potential for falling between 0 and 5 instead of 5 to 10 last year.
What is the margin of manoeuvre of reinsurers To keep a category rating, major rated reinsurers know that they cannot, overall, let spin rates. They can still play on the fragmentation of the cycle expensive to the CEO of SCOR, Denis Kessler , which is that "there is one, but prices for reinsurance. For Fitch, the decline in premiums in the first half (1.9 overall in $) is rather a sign that the famous "underwriting discipline" is confirmed. Remains a difficult to solve equation: where to allocate to the best of the capital remaining surplus "Sector wins the technical cost, thereby ensuring the remuneration of the capital, but little more." "In a degraded macroeconomic context, if rates do not stabilize in 2009, reinsurers are at risk to see their rating down", warns Yann le Pallec, S & P.
