Rates

The state body supporting earthquake cover has seen risk transfer requirements swell over the past decade.

“When you deploy property aggregate, the return you need on that is meaningful in light of the risk that you’re assuming,” Zaffino said Thursday. “I’m not sure if a plus mid-single digit [rate increase] gets you there in light of the [loss activity] we’re looking at.”

The Convex CEO said that the reinsurance market was yet to accept the true scale of its Covid-19 exposure.

Reinsurance market tightening and loss ratio deterioration are two factors fueling momentum in cyber rates.

Moody’s expects RMS, which had about $320mn in revenue around $55mn in operating income last year, to become accretive to earnings by 2025.

Adjusted for large renewals and IPOs, the pricing index rose 7.7% in the second quarter.

RenRe CEO Kevin O’Donnell said cyber reinsurance rates were two fifths higher in Q2 than during the same period last year.

The broker said there were signs the downstream market was “topping out” after several years of major hardening.

International insurance broker Howden said rising ransomware losses represented a “digital pandemic” that have helped to drive average global cyber insurance rates up 32% year-on-year.

Reinsurance rate increases are tapering off, but the recent influx of capacity will not cause pricing to “fall off a cliff” thanks to continuing market discipline, according to Willis Re’s James Vickers.

Carriers also reported premium expansion and improved solvency during the quarter.

The London market has seen a marked slowdown in specialty insurance rates year-on-year, in the latest evidence that the recent upswing in rates is starting to lose steam after three years of acceleration.