Overall terms and conditions in the European reinsurance market remain strong in 2007, with rates still attractive despite a softening market, according to Michael Zboron, managing senior financial analyst at A.M. Best Europe.
Speaking at an A.M. Best presentation on the first day of the annual Rendez-Vous reinsurance meeting in Monte Carlo, Zboron said that despite exposure to a number of natural catastrophes in the first half of the year, strong earnings trends continue for European reinsurers. He, however, confirms that July renewals indicate signs of a softening of rates, particularly in U.S. casualty lines.
Zboron also said the ongoing crisis in the U.S. sub-prime mortgage market is not a major issue for reinsurers as of yet.
“Strong merger and acquisitions activity is continuing,” he said. “And relatively low share prices might make some reinsurers an attractive target. The low level of Munich Re shares is interesting.”
Zboron also mentioned the EU Reinsurance Directive, passed by the European Parliament in June 2005. He said the adoption of similar rules for primary insurers, along with home-country regulation, made it easier to streamline market operations within Europe.