HVRRF - COVID-19 Means Reinsurers Won't Make Cost-Of-Capital In 2020: Fitch
The global reinsurance market will fail to make returns above its cost of capital due to the impacts of the COVID-19 coronavirus pandemic, Fitch Ratings has said following a review of ratings in the sector.
Cost of capital has been something the reinsurance sector has been struggling to earn for a number of years now.
Around five years or so ago, some lines of reinsurance business began to be seen as unprofitable, given the persistent softening of rates seen.
This resulted in reinsurers getting closer and closer to delivering returns that wouldn't compensate their costs