Hannover Re expects further reinsurance rate gains in April and July renewals

Hannover Re expects to see further improvements in reinsurance rate during the pending April and July renewals, in large part as the market continues to play catch up against prior large losses, top company officials signaled early Thursday (February 3).

Rate gains are still due from the Japanese market for the April renewals, despite a "relatively benign" loss record from the past two years as the memory of prior typhoon and flood losses lingers, an official said during a call hosted by chief executive officer Jean-Jacques Henchoz and Sven Althoff (pictured), board member for P&C.

"The understanding we have with Japanese clients is that we didn’t increase all at once two years ago, but that this needs to be a gradual process,” he said. “So we are expecting to see further increases in the Japanese catastrophe business, not as high as previous years, but trending positively.”

Likewise, Australia proved "more benign" over the past twelve months, but was "very busy before that," he added. "This will continue to be reflected in the pricing.”

The North American market has suffered much more severe losses as recently as 2021, a fact which became visible in rate gains on loss-impacted accounts during the January 1, 2022 renewals.

"We expect that trend to continue at the 1 July renewals," he said.

Outside of the loss-hit accounts, North American primary insurers are getting a bit more aggressive on the reinsurance market, either demanding better ceding commissions or leaving more net risk on their own balance sheets.  That trend "could continue, and we don't expect July 1 to be any different."

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