Global property catastrophe reinsurance rates-on-line increased by 27.5% at the January 1st, 2023, renewals, more than double the uplift seen a year earlier, as sellers of protection achieved steep price rises on contracts.
The Guy Carpenter Global Property Catastrophe Rate-On-Line Index leverages data sourced from real, brokered excess-of-loss reinsurance placements, and has been maintained by the reinsurance broker since 1990.
It is the proprietary index of global property catastrophe reinsurance rate-on-line movements, covering all major global catastrophe reinsurance markets, and is updated following January 1st renewals each year by calculating the change in rates-on-line year-on-year across the same renewal base.
The data shows that the Index has been on the rise since the January 2018 reinsurance renewals, when it increased by 5.3% after falling 3.7% in 2017.
On average, at the respective January renewals, global property cat rates-on-line increased by 1.1% in 2019, 4.6% in 2020, 4.5% in 2021, and then by 10.8% at the January 2022 renewals.
This year, at the January 2023 renewals, the Index rose by 27.5%, so more than double the increase seen a year earlier, ensuring that this was the sixth consecutive year of increases for the global property cat reinsurance index, representing a cumulative total increase of ~65%.
As the chart below shows, it’s actually the biggest positive change in this index since 2006 when rates-on-line rose by an average of 36.6%, with the Index now almost back at the level seen that year.
As has been reported by brokers and re/insurers, much steeper reinsurance rate increases were achieved across contracts globally at the January 2023 renewal, with that contract renewal season a significant contributor to this Index.
Guy Carpenter’s Chief Executive Officer (CEO), Dean Klisura, suggested that reinsurers had the upper hand at the January cat renewals, as the reinsurance broker warned that the marketplace finds itself at a “crossroad” after a challenging period.
