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Fast money has changed the shape of industry returns and made scale more important
Hurricanes don’t bring the disruption they once did to catastrophe insurance and that is making returns for reinsurers less volatile but lower. This spells a wave of deal making in a quest to boost profitability.
This year has seen a string of large takeovers involving reinsurance—the business of insuring insurers, often against extreme losses. AIG has sealed a $5.6 billion deal for Validus of Bermuda and French group Axa is paying $15.3 billion for XL Group.