The large catastrophe losses and the ongoing uncertainty around the euro's sustainability may increase reinsurance demand, according to AM Best.

"Over the previous years, reinsurers generally experienced a declining demand for reinsurance capacity as primary companies increased retentions across the board," said John ANDRE, AM Best Group Vicepresident, "but recent events - global catastrophes, increased asset volatility and catastrophe model changes combined with increasing regulatory pressures on solvency margins - appear to have turned the tide on reinsurance demand, especially in loss exposed regions of the world," he added.

A disorderly exit or default by a euro member would create profound capital crisis in Eurozone economies and cause capital constraints in the primary insurance market. Such a scenario would probably increase reinsurance demand, is AM Best opinion.