Reinsurance News

Positive casualty rate movement factored heavily into renewal outcomes: Guy Carpenter

5th January 2022 - Author: Katie Baker

Continued positive underlying rate movement across casualty lines factored heavily into renewal outcomes, as prospective loss ratios showed continued improvement, according to Guy Carpenter in a new report.

guy-carpenter-logoThe global broking firm believes that the improvements have driven quota-share ceding commission increases, ranging from flat to up 1.5 points for excess casualty and flat to up 2.5 points on financial lines.

For cyber, rate improvements were viewed as an offset to ransomware concerns, making flat ceding commissions common.

The broker also noted that in contrast to pro rata placements, casualty excess of loss programs saw a continued reinsurer push for margin improvement after years of competitive market pricing and volatile results.

Loss-impacted renewals were the most challenging and experienced some panel turnover.

Casualty renewals were orderly, with any delays being driven by general market lag as well as negotiations across multiple placements.

Casualty capacity was generally sufficient, although outcomes ranged widely based on casualty line and capacity requirements.

The industry’s financial lines benefited from the healthiest reinsurer appetite, with cyber aggregate being the most challenged.

Guy Carpenter concluded that early distribution of detailed, high-quality underwriting information together with a broad and effective marketing strategy were highly influential in an effective placement process.

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