Reinsurers are taking a disciplined approach to the market as they continue to focus on underwriting profitability, Everest Re Group CEO Juan Andrade has told at an AM Best industry briefing.

Mr Andrade says the market is likely to remain relatively stable even as additional capital enters the sector, which already has plenty of capacity.

“It is not significant enough to move the needle and the reality is the new players that have come in have remained disciplined,” he said.

All participants are battling similar pressures with the COVID-19 pandemic, social inflation, natural catastrophe changes and lower interest rates.

“We put a premium on underwriting profitability and I think that is what you are seeing with our competitors across the board,” he said.

Hiscox Re CEO Kathleen Reardon told the AM Best briefing that companies with good track records and strategies would continue to attract capital.

“From a reinsurance perspective, this is the best market in almost a decade,” she said.

Reinsurers are also closely monitoring social inflation trends in casualty lines that have added to the impact of wage and goods costs pressures, particularly in the US legal environment.

“We know that the millennial generation, the Gen Z, they have a heighted commitment to social justice and equity and that is playing out in the higher jury awards to some extent,” Ms Reardon said.

Recent changes in Florida legislation are an example of positive change in that area, she told the briefing.

AM Best has a stable outlook for the global reinsurance market, with pricing trends among the tailwinds, while the global sector has also shown an innovative mindset.

Headwinds include claims uncertainty due to COVID-19, secondary perils and social inflation, while the industry must also deal with risk modelling challenges, new capital entering the segment and limited investment alternatives.