John Dacey, the Group Chief Financial Officer (CFO) of reinsurance giant Swiss Re, has said that in all cases, rate movements at the April 1st renewals were adequate for the firm and that it’s optimistic about the important June / July renewals season.
Swiss Re today reported its financial results for the first-quarter of 2019, including an update on its experience at the recent April 1st renewals, which saw much of the loss-affected Japanese business come up for renewal.
Overall, treaty premium volume increased by 18% and the price quality improved 1%. The reinsurance giant notes that it reinforced its strong position in the country, increased premium volumes by 10% and experienced improved price quality of 7% during the renewals.
Discussing the most recent renewals during a Swiss Re Q&A session held today, CFO Dacey said the Swiss Re thinks rate increases in Japan were strong, and while rates in other parts did not increase particularly, “in all cases, we found the rates to be adequate for us.”
In light of the Japan renewals being in line with Swiss Re’s expectations, it’s maintained its 98% P&C Re combined ratio estimate for the full-year 2019.
Dacey explained that the positive results Swiss Re experienced following the 2011 Tohoku earthquake and subsequent rate response, is playing out again in 2019 following typhoons and other flooding and storm events in the region.
The hope for market players is for more material and sustainable rate increases at the important June and July renewals, which focus heavily on loss-affected U.S. business.
Commenting on the upcoming mid-year renewals, Dacey said: “We see important renewals in the U.S. in June and July, and the continuing impact of California wildfire in particular, we expect to support reinsurance rates moving forward.”
Adding: “Hurricane Michael may not have been a big dollar loss compared with the 2017 events, but in terms of nature it was recently upgraded to a level 5 storm. The industry got lucky by where Michael hit and I think anybody that is operating in the U.S. property market appreciates that the violence of that storm is not to be forgotten. We remain somewhat optimistic about renewal rates in the U.S.”