The first finding regards the renewal of reinsurance treaties. The market stakeholders concur that reinsurers have displayed a great deal of flexibility.
The absence of major claims in 2006 added to the excellent results account for the reinsurers' conciliatory mood.
The second explanation pertains to the fact that reinsurers are in need of premiums.
Third explanation: the annuity provided by the rating system which is in favour of large reinsurers. Everyone is seeking partners such as Munich Re, Swiss Re and Hannover Re [1], even for small business.
In such a context, the leaders are willing to concede discounts and to propose favourable conditions. However, they would require higher participations in return.
The big losers of such moves are the regional reinsurers who are always on the wrong end of the road. Solicited when the wind of bad results is blowing and discarded from some business in lucky periods.
Links:
[1] https://www.atlas-mag.net/en/article/hannover-re