Data from global reinsurance broker Guy Carpenter shows that property catastrophe rates-on-line in Continental Europe increased by 30% at the January 1st, 2023, renewals, marking the largest single rise since 2001.
This is according to Guy Carpenter’s Continental Europe Property Catastrophe Rate-On-Line Index, which shows that the average rate-on-line for this class of business is now back close to the levels seen in 2007.
It’s the largest single rise in this Index since 2001 when a 38.9% average increase was recorded by Guy Carpenter, which was followed by a 27.5% rise in 2002.
At the January 2022 reinsurance renewals, this Index rose by 23%, in part as a result of the substantial level of flood losses seen in Germany during 2021.
The 30% rise in Guy Carpenter’s Continental Europe Property Catastrophe Rate-On-Line Index at the January 2023 renewals, means the Index has now risen by 60% in two years, which offers a significantly more attractive rate environment in the region.
For the chart below, data is sourced from real, brokered excess-of-loss reinsurance placements which Guy Carpenter has maintained since 1990.
The Index is updated after the January 1st renewals each year and is calculated by analysing the change in reinsurance rate-on-line (RoL) year on year across the same renewal base.
It’s clear that after enduring a low during the prolonged soft market between 2016 and 2021, property catastrophe rates in Europe have increased significantly over the past two years.
What’s more, sources suggest that rates-on-line for this business are still insufficient and not sustainable at current levels, so it will be interesting to see what happens to European property cat pricing throughout 2023, especially if there are notable losses in the region.
