• Fitch maintains negative outlook for global reinsurance sector
• ANZ finalizes $0.74 billion reinsurance deal with Zurich
• Tokio Marine gains approval for post-Brexit subsidiary
• Sompo completes Nipponkoa integration

According to Reinsurance News, the ratings agency does anticipate that profitability is likely to improve for the sector in 2018.

This increase in profitability will be driven by normalized catastrophe losses and improved pricing as a result of the high level of catastrophe losses experienced in 2017, the report said.

The firm believes the underlying accident-year reinsurance combined ratio, excluding catastrophes, will improve to 92.1% this year, from 92.6% in 2017.

However, these improvements may not be sustainable, following the softness of April renewals, which struggled against the persistent flow of alternative reinsurance capital, the report said.

Fitch said: “The influx of alternative capital (the additional capacity being provided by capital market investors willing to accept lower prices for catastrophic risk) limits cyclical price rebounds historically seen after periods of severe catastrophe losses.”

The agreement is the first step in Zurich’s acquisition of ANZ’s Australian life insurance business, One Path Life.

The sale is comprised of two transactions totaling AUS $2.85 billion ($2.11 billion), including the AUS $1 billion ($0.74 billion) of upfront reinsurance commission.

The acquisition of 100% of ANZ’s One Path Life was first announced on December 12, 2017.

According to Intelligent Insurer, the new European subsidiary is in response to the UK decision to leave the European Union and is expected to begin operations in the second half of 2018.

Thibaud Hervy, Chief Underwriting Officer for Specialty Lines at Tokio Marine HCC, has been appointed Chief Executive Officer of the new entity.

Tokio Marine Europe will operate as a Tokio Marine HCC subsidiary in partnership with Tokio Marine Kiln, the report said.

Barry Cook, CEO of Tokio Marine HCC International, said: “It is important that Tokio Marine Group ensures that the relevant steps are being taken to allow the business to continue to grow throughout Europe.”

Charles Franks, CEO of Tokio Marine Kiln, added: “Tokio Marine Europe S.A. will provide a long-term solution to the uncertain developments around Brexit, and the company will provide all brokers and coverholders with continued security and high service levels going forward.”

It said the integration is a “significant milestone” for the company.

The announcement is one of many from the company highlighting its continued European expansion.

Sompo has already received regulatory approval from the Ministry of Finance of Luxembourg to launch its new subsidiary, SI Insurance (Europe) (SIIE).

The company said once SIIE becomes fully operational later in 2018, SJNKE’s continental European business will transfer to SIIE.

Sompo will retain its presence in the Lloyd’s market with Endurance at Lloyd’s and the London company market with Endurance Worldwide Insurance.