Reinsurance News

Demand for casualty reinsurance increases at mid-year renewals: Willis Re

20th July 2017 - Author: Staff Writer

Commenting on trends in the casualty market after the 2017 mid-year renewals, Willis Re said demand for reinsurance is increasing as the cyber market expands and global demand is stimulated by pending regulation in the European Union (EU) and Australia.

Reinsurance renewalsAs underlying cyber coverage expands with first party exposures, reinsurers appear to have become more focused on aggregate accumulation.

With the exception of London, most cyber capacity written remains quota share or stop loss with largely flat ceding commissions.

U.K. and European casualty business – which brings valuable diversification benefits – remained a target class for reinsurers, with larger established reinsurers being favoured for their perceived claims handling and underwriting referral expertise.

Changes to leadership of programmes remain rare, said Willis, although in Australia a trend emerged of buyers and reinsurers being increasingly prepared to sever long-term relationships if mutually beneficial terms cannot be realized.

The mid-year renewals showed excess of loss capacity is abundant for regional U.K. and European casualty business, but where  U.K. exposures are dominant there has been impact from concerns over the Ogden rate change.

For general third party liability risk, Willis noted, rate changes were comparatively less “elastic than in short tail classes due to smaller reinsurer panel choice and buyer preference for reinsurer panel composition continuity,” although “incumbent reinsurers have responded appropriately to client requests thereby avoiding too much strain in their trading relationships.”

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