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January Renewals See Hardest Property Catastrophe Reinsurance Rates in Generation
A convergence of global events has led to the hardest property-catastrophe reinsurance market in a generation and a “complex,” “grueling” and “late” January renewal season, which went down to the wire, according to reports issued by brokers Gallagher and Howden Re.
The geopolitical and macroeconomic shocks that occurred during 2022 included the war in Ukraine, fractured energy markets, 40-year high inflation, interest rate hikes, depleted capital and Hurricane Ian, the second most expensive natural disaster. The result, said re/insurance broker Howden, was the introduction of “significant volatility into the market” as well as massive reinsurance rate increases at the Jan. 1, 2023 renewals, which it described In a press release as the “hardest property-catastrophe reinsurance market in a generation.” (Approximately 50-55% of catastrophe reinsurance is renewed in January each year).
Howden said average global rate increases recorded at the renewals were 37%-plus for global property catastrophe (the biggest year-on-year increase at 1/1 since 1992); 45%-plus for direct and facultative business (a cumulative increase of 160% since 2017); 50%-plus for retrocessional cover (a cumulative increase of 165% since 2017) and 5%-plus for London market casualty reinsurance excess-of-loss rates (which reinsurers blamed on rising inflation and the prospect of higher claims severity)....
A convergence of global events has led to the hardest property-catastrophe reinsurance market in a generation and a “complex,” “grueling” and “late” January renewal season, which went down to the wire, according to reports issued by brokers Gallagher and Howden Re.
The geopolitical and macroeconomic shocks that occurred during 2022 included the war in Ukraine, fractured energy markets, 40-year high inflation, interest rate hikes, depleted capital and Hurricane Ian, the second most expensive natural disaster. The result, said re/insurance broker Howden, was the introduction of “significant volatility into the market” as well as massive reinsurance rate increases at the Jan. 1, 2023 renewals, which it described In a press release as the “hardest property-catastrophe reinsurance market in a generation.” (Approximately 50-55% of catastrophe reinsurance is renewed in January each year).
Howden said average global rate increases recorded at the renewals were 37%-plus for global property catastrophe (the biggest year-on-year increase at 1/1 since 1992); 45%-plus for direct and facultative business (a cumulative increase of 160% since 2017); 50%-plus for retrocessional cover (a cumulative increase of 165% since 2017) and 5%-plus for London market casualty reinsurance excess-of-loss rates (which reinsurers blamed on rising inflation and the prospect of higher claims severity)....
