According to Gallagher Re’s mid-year renewals report, inflation remained an ever-increasing topic for discussion for casualty reinsurance placements.
The report notes that reinsurers were seeking client by client explanations in relation to the management of this risk in reinsurance placements
Moreover, with an increased focus on pricing adequacy from reinsurers, the recent renewals also saw greater quoting differentials between those portfolios, with loss emergence and those without.
However, for those treaties without loss emergence, increases followed underlying exposure growth and inflation, but reinsurers continued to seek more meaningful corrections in the pricing of loss affected business.
Furthermore, the report stated that with the ongoing war in Ukraine, we have seen reinsurers focus on the sanctions clauses – making sure that all possible jurisdictions were included within clauses.
The report reads: “This has also highlighted many of the differences approach in relation to sanctions in different territories. Buyers have needed to consider in more detail the exposures in their business and their overseas exposures.”
Lastly, Gallagher Re notes that all reinsurers are scrutinising the exposures that are within reinsurance placements in much greater detail as well as historical performance.
There has been a lot of signalling in relation to future price corrections. The time it has taken to complete placements also increased with each reinsurer seemingly having their own set of individual issues to deal with.
Meanwhile, Gallagher Re’s mid-year renewal report also found that pricing in some cases in the Florida market had increased by 50%, along with property reinsurance rates in some cases in Australia, increasing up to 25%.
