The exit of sixth-largest reinsurer Gerling from the non-life reinsurance market is going to cause a few problems for the rest of the reinsurance industry, according to European sources. The company decided to stop writing new non-life reinsurance after it failed to find a buyer. But it will complete existing contracts.

The life reinsurance business will continue.

The problem is that there is little capacity around on the global reinsurance market to absorb the business Gerling will no longer be covering. “I think there’s going to be a bit of a capacity problem,” a London-based broker said. “The London market and Lloyd’s will absorb some of the business, but none of the reinsurers want all of it. It may well push premiums up, because there’s only so much capacity available and demand will be higher at the December renewals.” (See article in Local section)