Reinsurance News

Material variances, but property retro prices rise at Jan renewals: GC

7th January 2022 - Author: Katie Baker

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.

guy-carpenter-logoAs 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.

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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.

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