Reflecting on the January 1 renewal period, analysts at Miller have noted that casualty business became relatively more attractive to reinsurers in the London Market, following another year of elevated losses in the property catastrophe space.
Miller observed a “mixed set of outcomes” at the crucial 1/1 reinsurance renewals, with a further tightening of property cat business in particular.
In addition to the large loss events of the past year, climate change is seen as a potential factor in forward capital costs calculations for carriers as the escalating social inflation environment is for casualty.
As a result, Miller believes that specialist lines have also gained in appeal to some reinsurers.
But how much of the increased costs to pass on or retain will be a source of competitive differentiation for direct carriers.
For primary insurers, analysts reported that underwriting discipline is still apparent in terms of what is within appetite, with carriers only gradually beginning to broaden their scope away from tightly constrained parameters in their business plans.
Among macro factors influencing the marketplace, Miller highlighted ESG adoption, which could lead to restrictions on industry sectors such as fossil fuel, as well Covid stimuli packages introduced by governments, which could increase construction activity and have positive knock-on effects elsewhere.