Insurer sees underwriting gains in 2016
Rate reductions and low investment returns will continue in 2016 but despite the challenges the New Year should bring positive conditions for underwriting. That’s the view of Wells Fargo Insurance in its 2016 Market Outlook for commercial lines. The lack of catastrophic property losses in 2015 is part of the positive outlook.
“2015 was another buyer’s market for both property and casualty commercial insurance and affiliated lines, with rate decreases from medium- to- high single digits to low double digits,” said Doug O’Brien, Casualty & Alternative Risk National Practice leader. “Barring any catastrophic events, we expect similar trends will continue in 2016 for a majority of industries and coverage lines. Rate decreases are expected in the mid- to- high single digit range for most lines as new and existing capital is deployed into the property and casualty market.”
Among the firm’s other predictions: yields from investments should improve as interest rates begin to rise moderately; data analysis will provide more accurate insights; and mergers and acquisitions will continue in a bid to drive profitability.
Sun Life expands Indian business
Following this week’s new that French insurer
AXA is to boost its stake in Indian ventures, Canada’s Sun Life Financial is also taking advantage of larger FDI allowances. The Ontario-based firm has almost doubled its investment in Birla Sun Life Insurance Co. from 26 per cent to the maximum 49 per cent.
“We’ve long believed in the prospects of India. Never a straight line, but it’s an incredibly resourceful, innovative and industrious population,” said Dean Connor, chief executive officer of Sun Life told The Globe and Mail.
The joint venture was launched in 2001 and while in percentage terms insurance penetration in India is small; it was 3.3 per cent in 2014 and is expected to be 5 per cent by 2020; the market is vast with a population of 1.252 billion.
RGA acquires $22 billion of term life reinsurance from XL
Reinsurance Group of America has acquired a $22 billion block of term life reinsurance from subsidiaries of XL Group plc. The deal is for around 290,000 policies which will be administered by RGA on XL’s behalf following a short transition period. “This transaction supports RGA’s strategy of deploying capital by acquiring run-off life insurance blocks,” said Anna Manning, President, RGA. “Our deep expertise and understanding of the life reinsurance market has provided us with the tools to secure an innovative solution for XL. We are pleased to announce the completion of the transaction.” No further details of the deal have been disclosed.
