Pricing increases at Jan. 1 reinsurance renewals were lower than initially expected, according to a report released Tuesday by Guy Carpenter LLC, the reinsurance business of Marsh & McClennan Cos. Inc.

Clients saw hikes generally in the high single- to low double-digit range, with loss accounts seeing higher increases, Guy Carpenter said. Policy language also tightened in some cases.

Non-loss programs in the U.S. saw property reinsurance pricing percentage increases in the mid-single digits to low teens, while Europe, Middle East and Africa and Asia-Pacific regions saw low single-digit percentage increases.

Communicable disease exclusion wording was discussed “on every property renewal worldwide,” Guy Carpenter said. “Due to the potential global nature of this type of loss and the possible broader financial market correlation, capital providers and investors stipulated exclusions in most cases.”

Casualty reinsurance markets varied more widely at January renewals based on loss experience, covered lines and industry classes written. “More challenging loss experience or industry classes” saw greater pricing pressure and more restrictive policy wordings.

Cyber aggregate, in particular, experienced pricing pressure due to “continued” capacity tightening.

Pandemic and communicable disease language was most challenging for workers compensation, long-term care and casualty programs with particular exposures.

The Jan. 1 renewals saw an earlier start than usual but experienced a slower and more complicated quoting process, including rigorous contract reviews that ultimately led to later-than-average signings, Guy Carpenter said.

David Priebe, chairman of Guy Carpenter, noted in the report that a robust insurance-linked securities sector helped bolster reinsurance capital.

“New issuances in the catastrophe bond market have been very buoyant in the fourth quarter,” he said, “bringing full-year issuance to $10.8 billion, a new record for annual property and casualty catastrophe bond activity.”

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