Hannover Re anticipates potential property cat reinsurance rate increases on Japanese accounts following a series of typhoons.
Speaking at the Monte Carlo Rendez-Vous, head of global reinsurance Juergen Graeber said that because several Japanese carriers bought aggregate cover, the recent spate of typhoons to hit the country would lead to “detailed discussions” with Japanese clients and potential rate increases in 2019.
This comes after a relatively uneventful renewal at 1 April this year.
AIR Worldwide has estimated that industry insured losses from Typhoon Jebi could reach between 257bn yen and 507bn yen ($2.3bn-$4.5bn), according to a statement released this morning.
Hannover Re also expects increased premium and rates in international property cat primary insurance in 2019, Graeber said, particularly in the Caribbean and Latin America.
However, further price increases after the sharp rises seen in the current year were rather unlikely if no additional losses were incurred.
European rates would also be suppressed by the lack of recent major cat events in the region, he added.
In the US, Hannover Re anticipated increasing demand for property treaty as the broker market expands, according to Michael Pickel, who is responsible for North America and continental Europe.
He said public initiatives to increase flood and terror cover in the US would provide a chance for the carrier to grow further there.
However, CEO Ulrich Wallin warned that the assignment of benefits crisis in Florida would continue into 2019.
Wallin added that the crisis had not been taken into account at the 1 June renewal, where rates were flat, despite the loss creep on Hurricane Irma. This, he said, was due to an oversupply of capital due to Bermudian and ILS interest in the state.
Pickel added that the recent flurry of M&A activity made Hannover Re “happy” as some of the acquiring companies in the latest deals were Hannover Re clients, providing an opportunity for expansion of existing contracts.
In Germany, Pickel said, Hannover Re’s motor business was under pressure as competition between major players continued and repair costs increased.
He added that if there was no increase in primary motor rates in the near future, Hannover Re would need to “discuss” contracts and pricing further at the Baden Baden conference in October.
Sven Althoff, head of specialty lines worldwide, said there had been positive developments in general aviation insurance as capacity left the market, which he believed would continue into 2019.
However, he added the same was not true of global airline covers, where he described rates as “unsustainable”.
In marine, Althoff said that following Hurricanes Harvey, Irma and Maria, Hannover Re had seen price increases on excess of loss policies, particularly for cargo and pleasure-craft, as well as in primary hull.
Wallin concluded by saying the company anticipates an increase of more than 10 percent in its gross premium volume and net income in excess of EUR1bn ($1.2bn) for its total business.
And while Brexit would affect Hannover Re’s reinsurance bottom line, the carrier expected that doing business in the UK after Brexit would be similar to the situation in Canada and Australia.