Reinsurance in spain, key trends and opportunities to 2016

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					                 Reinsurance in Spain, Key Trends and Opportunities
                                       to 2016
The Spanish reinsurance segment registered a CAGR of 10% during the review period, despite the global
financial crisis and European debt crisis, and increased from EUR2.88 billion (US$3.94 billion) in 2007 to
EUR4.21 billion (US$5.86 billion) in 2011. The Insurance Compensation Consortium (CCS) provides
coverage for all natural disaster events through a compulsory surcharge based on sum insured, which
set a very low requirement for insurers to seek natural disaster reinsurance, which includes unexpected
natural and social-political risks. With gradual improvements in the economy and increasing confidence
towards insurance products among the Spanish population, the reinsurance segment is expected to
grow at a CAGR of 7.3% over the forecast period.

Reinsurance rates in Spain increased by 10% to 30% during renewals in 2011 as a result of the
occurrence of natural disasters. Treaty reinsurance led the segment during the review period and
accounted for 38–40% of the market share whereas facultative reinsurance accounted for 26–28% of
the market share. Results in the Spanish reinsurance segment in 2011 were positive in most lines of
business, with solid margins continuing for reinsurers in motor, liability lines, engineering and credit
where experience has improved in the last few years following losses in 2008.

Solvency II standards to influence reinsurance

Regulatory changes in the reinsurance segment presented new challenges and opportunities with
respect to competitive differentiation. The complete implementation of Solvency II norms in 2014 will
benefit the reinsurance segment through increased minimum capital requirement standards and
increased risk management capacity of insurers. The segment is expected to observe consolidation in
the presence of Solvency II capital requirements.

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Report Details:
Published: October 2012
No. of Pages: 103
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Growth of insurance segments will support reinsurance
The Spanish insurance industry grew from EUR54.3 billion (US$74.4 billion) in 2007 to EUR59.6 billion
(US$82.9 billion) in 2011, registering a CAGR of 2.3% during the review period. The life insurance
segment accounted for an industry share of 49.9%, followed by the non-life insurance segment with 37%
and the personal accident and health insurance segment with 13.1%. The life insurance segment
registered the highest growth rate during the review period with a CAGR of 6.4%. The Spanish insurance
industry is expected to grow at a CAGR of 3.6% over the forecast period. Such figures are expected to
influence growth in the reinsurance segment.

Spanish reinsurance rates were flat or down in January 2011 renewal

In the January 2011 renewal, Spanish reinsurance rates either decreased or remained the same. During
this period, the property risk and property catastrophe decreased annually by 5% whereas motor and
personal accident decreased by 5% to 10%. However, general third party remained the same.


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