Insurers resist price hikes from their own insurers

Insurers are resisting rate hikes from their insurers, including the property reinsurers that act as a safety net if insurance companies’ losses reach a certain level.

Why it matters: Reinsurers, which in the past have bid up rates as insurers accumulated more losses than expected, are competing more with alternative capital.

What’s new: Endowments and pension funds are increasingly putting money into catastrophe bonds, a vehicle that raises money for insurance companies — giving insurers other options to turn to in the event they need help paying out claims.

• What they’re saying: “The reinsurance pricing environment, in a word, has been frustrating,” Brian Young, CEO of reinsurer Odyssey Group, said at a recent industry conference.

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