Reinsurance renewals settle down for April deadline; capacity left untested
The April 1 reinsurance deadline brought “orderly calm renewal” with only “pockets of difficulty” in some specialty lines and no surprises in demand that might test capacity, Gallagher claimed in an early view to the season.
“Overall, the 1 April has seen an orderly calm renewal with reinsurers building on the 1 January 2022 renewal season achieving an improvement in the pricing and conditions on virtually all contracts,” Gallagher claimed.
“Some of the world’s largest reinsurance capacity buyers secured renewal at acceptable terms, though there was limited demand for additional cover to truly test capacity risk appetite of the global reinsurance market.”
Capacity was sufficient to balance the market “in most lines” but with continued individual stories of reinsurers de-risking by either reducing capacity or shifting into higher-attaching layers. Select names were said to compensate with “modest increases” in appetite.
Inflation has more clearly reared its head as a rate driver. “It is now a key topic on every line of business,” authors claimed.
“Buyers able to verify that their original underwriting is taking inflation into account through pricing, limit and original deductible management are being recognized by reinsurers and facing less pressure on their reinsurance renewal terms,” Gallagher analysts claimed.
Rates for Japan loss-free property cat XoL was said to have risk adjusted increases “tightly clustered” in a 1-5% range with earthquake-only covers at the lower end of the spectrum. Structures and capacity were said to be largely stable.
Risk adjusted rates were flat to lightly down across the spectrum of Japanese casualty lines.
Rates continued to harden for global marine, with delays to March and April renewal deadlines due to uncertainty surrounding the Russian invasion of Ukraine.
Aviation showed “some first signs of re/insurers firming approach” following the Russian expropriation of leased aircraft, but ended with “majority of placements renewed without too much change.”
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