Standard & Poor's has issued a stark warning about the strength of the global reinsurance market.
S&P's current highest rating for a reinsurer is AA- following five years of declining financial strength, coupled with the withdrawal from the market of major insurers such as Axa.
Standard & Poor's credit analyst, Simon Marshall, said: "Both these changes can be attributed to the earnings underperformance and volatility of the reinsurance industry, which in turn are driven by the higher industry risk factors that are features of the reinsurance market in general and the property/casualty reinsurance market in particular."
Marshall's colleague, Laline Carvalho, added: "It seems that industry risk is set to remain high for property/casualty reinsurance, driven by issues that are unlikely to improve materially in the years to come."
