Advertise here, Reinsurance News

Menu

Reinsurance News

Market dynamics suggest higher overall reinsurance rate increases at mid-year: Analysts

15th April 2019 - Author: Luke Gallin

Analysts at Keefe, Bruyette & Woods (KBW) expect property and casualty (P&C) insurers and reinsurers to report manageable catastrophe losses in Q1, while the market’s distinction between loss-free and loss-affected accounts’ pricing suggests higher overall rate increases at the upcoming mid-year reinsurance renewals.

Reinsurance renewalsIn terms of large events, the global catastrophe experience in the first-quarter of 2019 was relatively benign. Adverse weather events did occur in some parts of the world through the opening three months of the year, but despite the combination of nat cats and some non-weather losses, such as the Ethiopian Air crash, KBW expects losses to be manageable for re/insurers.

After two years of heavy cat losses, reinsurance rates did improve for loss-affected accounts at the recent April renewals, in line with or slightly above the levels previously expected by KBW. As with recent renewals seasons, available capacity remained plentiful and, KBW expects this trend to persist during coming renewals.

However, analysts do state that the inflow of alternative reinsurance capital, which has been said to have a dampening impact on price hikes post-loss, is likely to be managed more conservatively than during the last two years.

“We expect the market’s sustained distinction between loss-free and loss-impacted accounts’ pricing to persist during mid-year reinsurance renewals, implying higher overall increases following the last two years’ significant catastrophe losses,” say analysts.

The upcoming June and July reinsurance renewals are heavily focused on U.S. accounts that experienced heavy losses over the last two years, and reinsurers are hopeful of more meaningful and sustainable rate improvements to offset some of the challenges underpinning the current, testing market dynamics.

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.

Read previous article:
PIB looks to raise £200mn in new consolidation push

PIB Group, an acquisition vehicle backed by U.S private equity firm Carlyle, is looking to raise £200 million to support...

Close