Risk Lounge
Reinsurers push rate rises at 1/7 says report
Global reinsurers have remained disciplined at the pivotal July 1 renewals as with the exception of specific Asian coverages rates have continued to rise across the board and in particular those exposed to US catastrophe risks.
In its report on the pricing and terms of for the July 1 renewals intermediary and capital adviser Aon Benfield, found that while the US reinsurance market for hurricane exposed programs continued to harden, renewals of catastrophe exposed programs outside of the US remained firm and were influenced by regional loss experience and reinsurer competition to participate in regional programs.
Fears that capacity would be exhausted by the third quarter of the year look to have been unfounded but reinsurers were seeking to increase the rates charged for the available cover.
While July 1 remains a significant renewal date in the United States, the expected rate hardening caused many programs to be marketed and placed prior to July 1. Pricing changed at a level consistent with June 1 renewals – increasing 10 to 15 percent.
Bryon Ehrhart, Chief Executive Officer of Aon Benfield Analytics, said: "The July 1 renewals continued to reflect the hardening of rates for programs that include US hurricane risk. Other major catastrophe aggregate zones held firm or increased slightly reflecting the limited opportunity to improve upon already accretive economic terms held by most cedents. Reinsurers have generally done a superior job of managing capital through these turbulent times and have continued to renew the core capacity required by our clients."
In the Asian market, excluding China and Japan, there were no major changes in coverage, exclusions and conditions in property catastrophe lines. Whereas in the UK, rate increases of up to five percent were recorded in property catastrophe lines.
Meanwhile, in Latin America, property excess of loss prices rose by up to five percent, with broadly stable terms and conditions and higher levels of retention in certain programs.
