With 2021 being affected by catastrophe events, property retrocession renewals experienced price increases in both aggregate and occurrence products at 1/1, according to reinsurance broker Guy Carpenter.
As expected, the largest changes were in loss-affected accounts as well as low-lying aggregate placements following reductions in available capacity, says Guy Carpenter.
The broker noted that there was a “material variance in pricing depending on loss experience in 2021 and for aggregate contracts in particular, loss history became a much more dominant pricing metric than in prior years.”
For buyers of protection, this led to some higher retentions and a greater prevalence of occurrence structures, where Guy Carpenter reports that capacity was more readily available at a price.
At the same time, the broker says that capacity was less restricted for both direct and facultative catastrophe covers than for retro.
Guy Carpenter has reported reinsurance price increases in property of over 30% on some loss-impacted business at the crucial January renewal period.
The broker’s Global Property Catastrophe Rate-on-Line Index increased 10.8% year-on-year, with analysts finding that structure adjustments, particularly on retentions, were more prevalent in heavier loss-impacted sectors.