Abundant capital across the marine space and continued pressures from both attritional losses and 2017’s hurricane trio Harvey, Irma and Maria is curbing pressure for upwards rating movement, according to Willis Re in its latest 1st View report.
Additionally, regional catastrophe loss experience and specialism-specific performance have influenced renewal terms in localised international/niche product markets, slowing the pace of upwards rating pressures in certain areas.
Other areas of marine that have experienced flat to slightly increased rating conditions include the specie market, energy facultative reinsurers, and the Protection and Indemnity reinsurance market.
Excess of loss pricing also remains stable to moderately upwards with scale of pricing adjustment subject to changes in portfolio exposure and loss experience.
Conversely, Gulf of Mexico windstorm coverage continues to attract rating increases as reinsurers seek to redress the balance between sustainable pricing and supporting clients in challenging market conditions.
Carriers offering cargo lines are under pressure to seek rating increases, while recent hurricane losses and continued negative cargo results has meant that reductions on cargo accounts are largely a thing of the past, according to the reinsurance broker.
Willis Re found that International reassureds are looking to expand coverage and territorial scope as a means of obtaining additional value from their reinsurance partners.
Supply of capital to Non-Marine Retrocession remains strong from both traditional and Insurance-linked securities (ILS) players, with ILS capacity more constrained than this time last year due to a higher deployment rate of funds.
Competition for business among reinsurers is high with buyers benefiting from better-than-expected pricing and significant line sizes, says Willie Re.
Elsewhere, Personal Accident/Life catastrophe saw a number of new entrants increasing the capacity of an already over-subscribed market with nuclear, biological and chemical terror becoming standard inclusions due to a broadening of market conditions.
The U.S. medical excess market continues to experience increase in frequency and severity of large medical claims, with specialty pharmaceutical claims continuing to become the biggest challenge for all players.
Willis Re reports shakeups due to large losses and key medical reinsurance markets pulling out due to losses and that new entrants and significant capacity are keeping the medical excess market competitive.
Political risk experienced no significant change in reinsurance capacity, says Willis Re.