2nd Jan 2014 10:20
LONDON (Alliance News) - The development of alternatives to traditional reinsurance, such as catastrophe bonds, has allowed insurance companies to negotiate down reinsurance rates to their lowest levels since at least 2005, the Financial Times reported Thursday.
Insurers have secured rate reductions of as much as 25% in important areas of reinsurance in their negotiations over annual policy renewals that concluded this week, the newspaper said, citing leading brokers.
The advent of "insurance linked" securities have been attracting non-specialist investors including pension funds, the FT said, making some regulators worried.
http://www.ft.com/cms/s/0/3e96fbea-72ce-11e3-b05b-00144feabdc0.html#axzz2pECzl1oW
A report by Willis Capital Markets & Advisory in November said non-life catastrophe bond issuance in the third quarter of 2013 was at its highest in fifteen years.
In September, Lloyd's of London Chairman John Nelson warned of the need to make sure that the opportunities of new non-traditional capital entering reinsurance should always be priced appropriately to the risk to which it is attached.
By Tom Waite; [email protected]; @thomaslwaite
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