Rates

The outlook is based on a strong pricing environment and higher interest rates, but the ratings agency warns of changing climate trends, and social and economic inflation.

Intermediaries have highlighted the ‘evolution’ in reinsurance buying as hard market conditions are expected to continue.

Hamilton Re said early signs point to 25%-30% rate rises on Japanese wind.

The broker said that rates were falling but remained well above soft market levels.

There has been no let-up in rate reductions so far this year, as fears mount about the profitability of the class.

The market has quickly moved away from dramatic hardening in 2020 and 2021 following an influx of capacity.

Evan Greenberg addressed questions about property cat reinsurance on a Q1 earnings call.

This was the highest single-year increase for the US index since 2006.

The executive noted that the quarter marked the 21st quarter of rate increases.

Only D&O and workers’ compensation clients experienced price decreases during Q3, according to WTW.

The broker said a dearth of IPOs had created a “buoyant environment”, with both start-ups and incumbents competing.

The company will fund the raise from surpluses following bancassurance exits.

Inflation and a full post-pandemic return to shipping are expected to impact future claims.

The risk is increasing of some cedants ‘running naked’ in early January as the market faces a ‘horrendous bottleneck’ of negotiation ahead.

While competition is picking up, a likely rise in claims during a recession is likely to prevent a return to a soft market.

Rates began falling at the mid-year but loss activity has changed the mindset of underwriters.

Rate rises were anticipated by brokers amid inflation and investment market volatility.

Real non-life premiums are forecast to grow by 1.8% in 2023 and 2.8% in 2024.

In Q3, 46% of primary policies renewing with the same limit and deductible received a price decrease, while 16% received a price increase, according to Aon. 

Cyber saw the biggest increase in the quarter, while financial and professional lines saw a slight reduction.

Winter storms in the first half of 2022 are expected to result in claims totalling EUR1.4bn.

Reinsurers are demanding price increases and higher retentions as brokers warn cedants to be ‘realistic’.

Reinsurers and brokers alike have warned of a rocky 1.1 renewal process ahead as the industry grapples with multiple issues including inflation, climate change and geopolitical uncertainty.

Marsh CEO Martin South added that the broker expected to see property rates easing, but "the reverse is going to be true."