Re/insurance broker Aon has released a new report for the first half of 2021, giving insight into the Property & Casualty insurance market.
The broker’s report underlined how the casualty market is proving its value as a good diversifier for reinsurers’ challenged property experience in recent years, along with robust primary casualty rate levels and thoughtful original limits management.
Aon explained that as the underlying economic pressures are persisting, the market has largely been distracted from social inflation concerns with the positive rate momentum.
Unsurprisingly, the casualty market saw a marked split between quota share and excess of loss for July renewals.
The general casualty quota share market has improved with new capacity as well as many long standing casualty reinsurers targeting growth given the current market conditions.
However, despite continuing to support casualty quota shares in a meaningful way, some historically larger writers have taken a more cautious view on underlying trends and have limited desire for significant growth.
In contrast, capacity for excess of loss programs is dependent on the performance of the program and not as readily available as support for proportional placements.
Environmental capacity for pro rata remains strong, despite comparatively lower original rate increases than some other casualty lines. Excess of loss capacity is largely pricing dependent and less diversified.
Professional liability has also seen a healthy increase in capacity available in the market, with improved ceding commissions and multi-year capacity are being achieved at renewals.
Capacity exists for pro rata and excess of loss medical programs, though reinsurers remain cautious.
The report saw that insurers are taking more of their pro rata placements net, bolstered by strong rate increases on the underlying business and greater comfort with reduced gross limits in their portfolio.