April 2023 Q7

Discussion in 'SP8' started by o.menary11, Mar 31, 2024.

  1. o.menary11

    o.menary11 Active Member

    Hi,

    How would a hardening reinsurance market impacted the expected investment return assumption?


    Thanks!
     
  2. Katherine Young

    Katherine Young ActEd Tutor Staff Member

    If a reinsurer expects lower returns on its investments, it will be forecasting lower profits. Hence it is likely to increase its premium rates to compensate.

    In other words, the reinsurance market might harden in response to lower expected investment returns.
     
    o.menary11 likes this.

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