Reinsurance rate declines bottoming out?Reprints
While reinsurance rates continued to decline at the Jan. 1 renewals, terms and conditions broadly remained stable, Hannover Re S.E. said Wednesday in a call for analysts and investors on the renewals.
And while a predicted slowdown in the pace of rate decreases was not seen across all territories, there are indications that the market is starting to bottom out, the German reinsurer said in the call.
Continued interest from cedents in buying multiyear coverages is one indication that buyers expect the current soft market to bottom out soon, said Jurgen Graber, Hanover, Germany-based member of the executive board with responsibility for global coordination of property/casualty reinsurance at Hannover Re.
Mr. Graber said that demand for reinsurance increased at the Jan. 1 renewal, prompted in part by buyers purchasing solvency relief coverages to help them comply with Solvency II, the risk-based capital regulatory framework introduced in Europe on Jan. 1.
Typically, there were no great changes to terms and conditions at the Jan 1 renewal, Mr. Graber said, adding that significant changes, such as extensions of hours clauses, had taken place in 2015 and that buyers at this year's Jan. 1 were more focused on price.