Moody's expects reinsurers' near-term profitability to continue to receive a boost from rising interest rates and better pricing trends.
Reinsurance companies saw stronger profitability in the second quarter and the first half of the year overall. Moody's estimated median annualized return on equity for reinsurers of 6.9% as of June 30. The median annualized ROE was 1.6% at the end of 2017.
However, Moody's also noted that pricing momentum stalled in June and July, a period when reinsurers renew catastrophe protection contracts covering the U.S., especially Florida. The agency expects property rates to go down because of strong growth in alternative capital and excess traditional capital.