Reinsurance prospects "have turned for the worse" · Transcript

Ajit JainThe reinsurance business is not as good as it was, and it's unlikely to be as good as it was. There's a lot of money that's come into reinsurance, not because they want to reinsure people, but because it's become either a fashionable asset class for people that are looking for so-called non-correlated investments and may not know what they're doing, but it's something you can sell people. You know, that's an attractive line to go to pension funds with. Secondly, it's a beard for asset management. So if you go to Bermuda and start a reinsurance company, you can actually run a hedge fund and you need a little business to make it look like you're doing something other than running a hedge fund and locating it offshore so you don't pay any tax. But that's the primary motivation. So when you get a whole lot of people that are bringing money in and they sort of need your facade of reinsurance to cover up what they're real. motivations are, you're likely to get less attractive prices in reinsurance. And that's been happening on a fairly large scale. And I would say that I would expect that reinsurance business in the next 10 years to not be as good as it has been, I'm talking about the whole industry as it has been, you know, in the last 30 or something like that. It's a business whose prospects have turned. for the worse. And there's not much we can do about it.