There are some positive signs that help to reinforce the view that the reinsurance market is largely nearing the bottom of the pricing cycle, as some catastrophe loss hit U.S. nationwide property accounts experienced rate increases in April.
Risk loss hit U.S. property reinsurance renewals in April 2017 experienced rate increases of around 5%, while catastrophe loss hit accounts experienced rate increases of anything up to 15%, according to data from broker Willis Re.
Rate movements for the loss free accounts ranged from flat to -5%, which further underscores the potential for a bottom of the market to be appearing.
Analysts at Keefe, Bruyette & Woods (KBW) said they view this change as a positive, reflecting the likelihood that underwriters feel that pricing has reached the lowest point in the cycle for some of these accounts.
The analysts note that this is the first time accounts of this sort have widely experienced rate increases since 2012’s superstorm Sandy. Although they do note that it’s likely that the accounts featuring rate increases likely only represent a relatively small amount of premium.
However, the overall picture for the U.S. property catastrophe reinsurance market remains one of slow decline in pricing, as the sector saw an estimated -2.5% rate movement in April 2017, which is actually slightly steeper than the -2% seen in January. It will be interesting to see how that plays out at the mid-year renewals.