With the property market already “tightening” prior to the landfall of hurricane Ian, the high estimated loss numbers suffered due to the hurricane have largely proven valid, and its impact on the reinsurance market has been “immediate and substantial”, according to the latest edition of the REDY Index by CRC Group.
The Index shows that following the 1/1 excess & surplus (E&S) property treaty renewals, all the possible projections of change have been realized.
These outcomes have included restricted capacity resulting in shared and layered placements for TIVs of all sizes on inland as well as coastal risks, further pressure on rate, and increased retentions as well as pressure on commissions.
Additionally, the Index noted that while rates continued to rise throughout Q4, adjustments to terms and conditions as well as rate is expected to accelerate in Q1 and throughout 2023 due to the impact of changes in property reinsurance.
“Driving this acceleration is a hyper-focus on inflationary concerns such as valuation as well as dramatic changes in E&S reinsurance structures including cost increases on loss-free business, increased retentions, and a reduction in ceding commissions,” CRC noted.
The REDY Index by CRC provides critical pricing analysis on a monthly basis to offer insights on pricing trends by industry or coverage.
