Reinsurance companies, like White Mountains, Everest Re, and Platinum Underwriters, are facing a rough profit outlook as more competition enters thir segment of the insurance market and pushes prices down. Is the pain temporary or the new normal?

In the following video, Motley Fool financials analyst David Hanson discusses how the lack of catastrophes has resulted in reinsurance companies accepting lower prices on the premiums written. David also notes a recent warning from Warren Buffett that outsider investors are potentially ignoring the out-sized risks associated with catastrophe bonds. 

David Hanson owns shares of Berkshire Hathaway. The Motley Fool recommends Berkshire Hathaway. The Motley Fool owns shares of Berkshire Hathaway and Platinum Underwriters Holdings, Ltd.. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.