The London reinsurers are the most exposed to natural catastrophes

Lloyd’s Building

The rating agency underlines that the inadequacy of London reinsurers’ equity in relation to their liabilities would place them in a difficult position in the event of major natural catastrophes.
Reinsurers having the lowest ratings would suffer significant pressure on their capital.

These reinsurers would, therefore, find it difficult to retain business, especially if their shareholders find it easier and faster to invest in alternative capital as cat bonds than proceeding with their recapitalization.
S&P has stated that many North American reinsurers are in a similar situation.