Reinsurance rates up at April 1 renewals
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April 1 reinsurance renewals saw property rate increases largely in the single and low double digits as capacity remained mainly adequate, bolstered by insurance-linked securities, according to a report Thursday from Willis Re, the reinsurance unit of Willis Towers Watson PLC.
Cyber and specialty rates jumped higher, however, with loss hit accounts up as much as 100%.
Exclusionary language such as pandemic and silent cyber “followed the approach set at 1.1.2021,” including both market standard clauses as well as more customized language.
U.S property renewal rate increases hit 25% for catastrophe loss hit accounts, but for loss free accounts ranged only as high as 15%, Willis Re data showed. Globally, increases reached 35% in Korea for loss hit accounts and 40% for Japan, Willis Re data showed.
In casualty markets, cyber rates surged 20% to 30% for excess of loss cover with no loss emergence and 30% to 40% with loss emergence.
Global aerospace reinsurance renewals saw the largest reported increases, with catastrophe loss hit accounts up 50% to 100%.
Policy language continued to be a focus of renewal talks.
“Although there is more consensus around exclusionary language for Communicable Disease and Cyber than at 1.1.2021 it continued to be a hot topic for most renewals,” Willis Re said in the report.
Momentum in the catastrophe bond market “allowed many primary U.S. and Japanese sponsors to secure competitively priced protection in cat bond form. … Significant demand persists for the cat bond product, exemplified by the vast majority of issuances both upsizing in terms of capacity issued and pricing at the bottom or below the initial pricing guidance.”
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