Home Breadcrumb caret Industry News Breadcrumb caret Industry Outlook stable for reinsurers: Moody’s But profits could be threatened by climate change By Staff | September 3, 2019 | Last updated on September 3, 2019 1 min read © photografier / 123RF Stock Photo Amid rising losses stemming from floods, wildfires and hurricanes, profits for the global reinsurance industry are likely to remain under pressure, but the sector’s credit outlook is still stable, says Moody’s Investors Service. In a new report, the rating agency said that its outlook for global reinsurers in 2020 is stable due to the industry’s strong capital position, rising prices and increasing demand. “Reinsurers’ capitalization is strong, with a significant cushion above regulatory and risk-based capital requirements, and prices have climbed, relieving some pressure on profitability,” Brandan Holmes, vice president and senior credit officer at Moody’s, said in a statement. Despite these trends, Moody’s said that industry profits remain under pressure, particularly as losses from natural disasters rise amid the ongoing effects of climate change. “Climate change makes the frequency and severity of natural hazards less predictable, making it harder for reinsurers to model and price appropriately,” it said. Additionally, Moody’s said that reinsurers are “increasingly exposed to asset risk as low interest rates encourage investment in lower quality corporate debt and illiquid assets.” Staff The staff of Advisor.ca have been covering news for financial advisors since 1998. Save Stroke 1 Print Group 8 Share LI logo