Chief Executive Officer (CEO) of Aon Benfield Asia, George Attard, has said entering Asia-Pacific renewals at 1/1 sparked a divergence of expectations between reinsurers and insurers, in relation to what pricing the former were looking for and what buyers were looking to pay.
Speaking with A.M. BestTV at the 29th EAIC conference, held in Manila earlier this month, Attard spoke of a risk-adjusted renewal with some uptick seen on programmes that had been loss impacted.
“That is the overall context of the global market, we’re still seeing plenty of capital in the market.”
Commenting further on misaligned expectations, Attard said, “I think the early impact and the expectation coming out of that loss activity was a pressure on reinsurer balance sheets and then PMLs, and they were looking to drive pricing.”
Rates have since improved in loss-affected lines of business following 2017’s high U.S. catastrophe losses inflicted by hurricane Harvey, Irma and Maria, while a more surprising flat rate has been witnessed elsewhere around the world, in places like Asia, commented Attard.
“Ultimately it was a U.S. activity, there was hardening on loss impacted programs in the U.S. Elsewhere, globally, we ultimately saw it play out. Excess capital, ample supply of capacity, ended up in a risk-adjusted flat outcome.”
Attard spoke of an April 1 renewals dominated by Japan, India and Korea, adding that Japan saw some increase in exposure growth, but ultimately pricing came in at risk-adjusted flat.
“In India, some pressure on the proportional business, but markets have been looking to write both proportional and taking a slice of the XL (excess of loss), so ultimately it preceded in an orderly fashion, risk-adjusted flat. And we expect that trend to continue.
“We are currently going through the Australia/New Zealand 1/7 renewals, a key renewal for the region. And again, the expectation there is risk-adjusted flat, we are seeing stable capacity and stable demand.”
