According to Gallagher Re’s latest mid-year renewals report, property reinsurance rates in some cases in Australia has increased by up to 25%.
In their 1st View Report, the broker stated that it was a much later and tougher renewal than normal, with reinsurers seeking additional information on the impact of flood losses, demand surge and inflation on portfolios and original pricing.
The report found that in the risk market, some reinsurers pushed higher retentions and lower occurrence limits for Cat Pressure was also applied to prepaid reinstatements.
Additionally, following the recent flood losses, reinsurers were also less inclined to support lower Cat layers or Cat layers perceived to be exposed to frequency losses, leading to increased retentions for some buyers.
Furthermore, the report also noted that there was a wide variance in quotations received from reinsurers, and that long-term relationships were even tested, with some reinsurers walking away where pricing was considered inadequate.
However, Gallagher Re added that pricing became more commercial, with a keen focus on key relationships to try and reach compromises satisfying both parties.
Meanwhile, also in Gallagher Re’s mid-year renewals report, it found that pricing in some cases in the Florida market increased by up to 50%.
