Reinsurance News

Aviation reinsurance market unaffected by COVID at renewals: GC

10th January 2022 - Author: Matt Sheehan

Analysts at Guy Carpenter have reported that the general aviation and aerospace markets remained “relatively unaffected” by COVID-19 at the January 1, 2022 renewal period.

After two years of increases in these markets, the broker reported that reinsurers priced as before or slightly higher (up 2.5%) as an average across programs on a risk-adjusted basis.

Profitable treaties also received minor increases in commissions and space clients were able to complete their panels with relative ease at January 1.

Airline insurers have had to be nimble with their income forecasts as they were faced with many variables, including rate expectations and flying customer volumes.

And this followed two extremely challenging years for the industry, which has faced ongoing disruption due to the global pandemic.

Looking at other specialty markets at 1/1, Guy Carpenter noted that reinsurers in the marine space maintained overall underwriting and structure discipline during renewal negotiations.

Any claims activity here was price-sensitive, and the South African riots led to some restructuring of select composite programs with more specific terror coverage being purchased.

In marine, there was plentiful capacity when pricing was deemed adequate, with new entrants having a limited impact at January 1.

However, Guy Carpenter observed that international pricing was at the lower end of pre-renewal expectations to flat, with the London markets having a mild hardening showing increases in cash spend of approximately 3% to 6%.

Turning to trade credit, low loss ratios and lower than forecasted claims led to reinsurance capacity from incumbent markets exceeding demand for programs at 1/1, meaning limited opportunities for new entrants.

As expected, analysts reported that trade credit cedents regained price movements at January 1 with proportional treaty ceding commissions increasing, and risk-adjusted improvements realized for excess of loss programs.

Guy Carpenter found that total dedicated reinsurance capital increased by 2.8% from the end of 2020 to end 2021 at $534 billion, driven by growth in both traditional and alternative capital.

The almost 3% growth in dedicated reinsurance capital from the $519 billion reported at year-end 2020, saw traditional capital grow by 2.7% and alternative capital by 3.7%, to $441 billion and $94 billion, respectively.

Print Friendly, PDF & Email

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.

Read previous post:
Swiss Re Corporate Solutions unveils changes to China leadership

Swiss Re Corporate Solutions, the global reinsurer's commercial insurance arm, has announced that Jingwei Jia, Chief Executive Officer (CEO) Greater...