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Reinsurers rethink as pricing pressure takes toll

The number of reinsurers re-evaluating their position in the UK life market is set to soar, says RGA business development manager Mick James.

He claims pressures on price and strong insurer and reinsurer competition is forcing more reinsurers to reassess their role in the sector.

He says: “Already, at the end of the first half of this year, we are seeing signs of a number of reinsurers starting to re-evaluate their position in the life market as it is simply more difficult for players to achieve any acceptable return.

“There are now about as many active reinsurers in the UK market as there are life offices, which means there is pressure on price.

“This is good for the consumer in the short term as it means cheaper products but this is not good news in a market where products are sold and not bought.”

Reinsurer XL Group has placed its life and life reinsurance division under “strategic review”.

PR manager Sebastian Kadritzke says: “It has nothing to do with market competition because the business has been profitable. It is whether you want a diversified company or focus on core business and basically we want to focus more on our traditional business.”

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