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April 1 property reinsurance renewals saw increases as large as 25% to accounts hit by catastrophe losses, while accounts free of losses of all types were flat in some cases, according to a report issued Monday by Willis Re, the reinsurance unit of Willis Towers Watson PLC.
The largest increases of 15% to 25% were for accounts in Japan hit by catastrophe losses, even as catastrophe loss-free accounts saw rates flat to up 7.5%, the report said.
In the U.S., accounts with catastrophe losses were up 5% to 20%, while catastrophe loss-free accounts were flat, according to Willis Re data.
Accounts with noncatastrophe losses rose between 2.5% and 10%, and noncatastrophe loss-free accounts were flat in the U.S., the data showed.
“Reinsurers are encouraged by improvements in primary rating levels across many classes and territories. These primary rate increases are filtering into reinsurance pricing,” the report said.
The increases in the reinsurance business, however, continue to lag those in the primary market, Willis Re said.
“Rate increases were balanced by flat renewals on non-loss affected classes and programs,” Wills Re said. “There are no emerging signs of generalized hardening rate levels across the market and pricing remains rational. Consequently, the observation from our January 1st View regarding primary rates moving faster than treaty rates still holds true.”
The report said April 1 renewals showed a “rational” approach to pricing.
“As the global reinsurance market looks to address the current supply/demand imbalance, being able to demonstrate a stable and rational base plays an increasingly important role when developing and promoting solutions to new buyers and core clients,” James Kent, London-based global CEO of Willis Re, said in a statement issued with the report.
January reinsurance renewal rate increases were “modest and increasingly regionalized” without overall trends, and ranged from flat to up 3% on average, S&P Global Ratings Inc. said Thursday in a sector report.