Fitch Ratings analysts forsee double-digit premium rate rises for property catastrophe cover in 2022, following an insured loss total of close to $100 billion in 2021 and the prospect of natural catastrophe claims increasing in frequency and severity.
In fact, reinsurance rates across catastrophe-related lines of business are expected to rise as much as 10% at the January renewals, supporting what Fitch Ratings analysts see as a sector with a positive outlook for 2022.
Lines including cyber risk and directors & officers (D&O) liability covers have also been flagged as likely areas for further double-digit price increases.
Fitch underlines cyber liability’s recent suffering from claims mostly, but not exclusively, linked to ransomware attacks, and adds that tighter terms and conditions and withdrawal of capacity only compound the upward pressure.
There’s a broad expectation from Fitch for 2022 to mark the fifth successive year of price rises, although a realistic expectation for growth to be slower than 2020, as non-loss-affected lines of business are likely to usher in broadly stable price development.
There’s also a belief that that the risk of rising inflation will remain manageable for the industry in 2022, and that while its trajectory has become more uncertain, it’s predicted to be only temporary, due in-part to the pace of the economic recovery and shortages in key supply chains.