European insurers ceding more despite slowing GPW

European insurers are buying more reinsurance, despite a cooling of written premiums, according to AM Best.

The firm looked at 20 of the largest European non-life cedents and found that between 2014 and 2015, reinsurance ceded increased significantly by 17.9% over the period rising from €37.5bn to €44.2bn; while grow premiums written (GPW) increased only by 6.2% during the period, rising from €313.9bn to €333.3bn.

According to reports from AM Best, H1 2016 results show that 2016 is set to continue this trajectory on both fronts.

Several factors have been credited for leading to the increased reinsurance purchasing, including Solvency II and the introduction of new lines of business.

AM Best senior director Carlos Wong-Fupuy added that the European market was using this time to take advantage of the soft rates: “Some of the largest insurers have increased their reinsurance purchasing as they take advantage of the soft rate environment and optimise the efficiency of their own capital.”

He continued: ”The need to protect capital and make it more efficient has become even more important following the implementation of Solvency II in 2016.”