55% of the industry participants we approached feel rate improvements will be more pronounced at the April and mid-year renewals than they proved to be at 1/1.
While reinsurance rates showed marked improvement in January, the margin of those improvements fell below the expectations of an industry weighed down by COVID-19 losses.
It’s worth noting that additional firming at Japan’s April and the US’ July renewals may have always been expected considering the heavy catastrophe losses that have been shouldered recently.
In addition, if capital continues to flow both in traditional and alternative forms, then reinsurance rates may not live up to expectations again.
January renewal negotiations have been categorised as complex yet adequate; defined by tightening T&Cs and improved pricing year-over-year.
Willis Re reported risk adjusted price improvements of around 2.9% in property lines, someway below previous expectations of +5%.
Programmes in North America saw the largest average rate-on-line increase at 8.5%, although pricing pressure was more subdued outside the United States.
Rates in Europe also reached a turning point as rates grew in the low-to-mid-single digit range.
Howden reported property catastrophe reinsurance rate rises of roughly 6%, while Guy Carpenter noted that overall, rate rises were more moderate than had been first anticipated.
According to Howden, lower investment yields, higher loss cost trends, another above-average loss year, concerns over climate change and general risk aversion were among the primary concerns for re/insurers at 1/1.
