Reinsurance renewals flat; US, Caribbean property rates up: Willis RePosted On: Apr. 3, 2018 10:25 AM CST
April 1 saw many flat reinsurance renewals as the trend of muted increases established Jan. 1 continued, according to a report Tuesday from Willis Re, the reinsurance arm of Willis Towers Watson P.L.C.
Meanwhile, cyber coverage continues to get increasing attention, and the U.S. and Caribbean continue to see the largest increases on loss accounts following the active 2017 catastrophe season.
In its Willis Re 1st View issued Tuesday, the broker said, “The trend set at 1 January continued at 1 April,” which was disappointing to reinsurers who nonetheless were somewhat encouraged by the prospect of new opportunity via increasing demand from some buyers, the report said.
Property rate movements worldwide were largely confined on average to a few points on either side of even, except for the U.S and Caribbean, which saw 5% to 10% increases and 20% to 35% hikes, respectively, on catastrophe hit accounts.
Cyber dominated the casualty scene as renewals for Japan came in largely flat to down a few points. Some insurers bought cyber cover on a standalone basis, the report said, and there was an increased interest worldwide in protection for “silent cyber,” cyber exposures that can creep into other coverage areas, such as property.
Specialties saw a “hard” market for marine in the wake of losses from hurricanes Harvey, Irma and Maria in the second half of 2017, with increases on loss accounts as high as 20%. Aerospace markets continued a “trend of no further rate reductions in (re)insurance that began in Q3 2017 (and) has continued in the Q1 2018,” the report said.
Both the alternative capital and merger scenes were bustling, the report said.
“ILS [insurance linked securities] assets under management both inside and outside the larger ILS funds continue to grow,” the report said. “Catastrophe bond new issue and secondary spreads for peak risks remains stable with plentiful capacity.”
Losses from the 2017 hurricanes did not seem to have roiled the market as some feared, as “loss development and claims collection from 2017 catastrophe events continues to proceed in an orderly fashion with few surprises,” the report said.
Mergers and acquisitions also saw increased activity.
In the wake of two big deals recently, Axa S.A’s $15.3 billion acquisition of XL Catlin and American International Group Inc.’s $5.6 billion acquisition of Validus Holdings Ltd., the “changing Bermuda carrier landscape and support of the macro theme “bigger is better, long-term sustainability and independence of sub-scale operations are being re-evaluated,” the report said.