Ryan Specialty on 1.1: some property rates may double; structures fold

The 1.1 2023 renewals could prove brutal in property, with rates on some loss-encumbered accounts doubling, with all-perils coverage wiped off the market and with most players still uncertain into the new year what form and shape of reinsurance coverage they will be backed by, the chief of  Ryan Specialty has said.

“This is just the beginning of a very, vey hard market and a market that is going o be short of supply,” CEO and founder Pat Ryan told analysts during the Goldman Sachs US Financial Services Conference.

“Everybody is going to be scrambling for capacity,” Ryan said. “It is very likely that most people won't know how much capacity they have until shortly after 1.1 … some believe it could be 1.5, 1.10, 1.15 before it is all finalized.”

Rates may take the most dramatic headlines, but Ryan sees deeper changes coming out of the 2023 renewals throughout contract structures.

“Rates are higher and rates are going o be higher than we expected,” Ryan said. “The rate increases started to manifest themselves in Q3 … By 1.1 they are going to be significant.”

“In many cases on loss accounts, exposed to losses, they could be high as a 100% increase.”

That kind of dislocation has pushed the market into equally notable changes in reinsurance structures, Ryan argued for analysts.

Changes in structures could prove “quite dramatic” with bigger retentions, possible investment in captives and an end to the once-dominant all-perils covers. “That is off the table now,” Ryan said.

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