Willis offer an assessment of how the reinsurance industry is surviving the credit crunch. Key points:

1. Reinsurers’ balance sheets have stood up pretty well, especially compared to the parlous situation in the capital markets.
2. Access to capital is going to remain tight, so reinsurers are being cautious about risk exposure.
3. So prices are going up, especially in capital intensive lines (like US cat)
4. Primary carriers are looking for more reinsurance, so as to reduce their risk.
5. But those same carriers are still not charging enough on their own inwards business.
6. The lack of trust in credit rating agencies means that carriers appear to be spreading reinsurance purchasing wider, and syndicating more, rather than lobbing everything into 2 or 3 carriers alone. This means more opportunity for the smaller RI carriers (and more work for brokers).

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