Summary
If a book of reinsurance business can be purchased for a price that rpresents the present value of estimated future cash flows of that book, it could be a preferred way to buy market share, given that the price of growing in the reinsurance business can include quoting new accounts at less-than-break-even pricing. Reinsurance picing, while still arguably adequate, has come down from recent peak levels, and the incentive to move renewals from one reinsurer to another usually includes price competition.
Analysis
Smaller and/or newer reinsurers find growth opportunities limited to winning occasional accounts ready to leave their current reinsurer. Pricing on such new business is typically problematic, so growth via acquisition may be safer than organic growth in the current market.
