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Reinsurers raise rates at midyear renewals: Report

Rising reinsurance rates

U.S. reinsurance rates increased across most property/casualty lines at midyear renewals, according to Willis Tower Watson PLC’s latest report.

Reinsurers pushed through increases in other regions, too, as primary insurance rates continue to rise, according to the report, released Monday.

Property catastrophe reinsurance rates for insurers with reinsurance programs that had previously been hit by losses increased between 5% and 25% in Florida, which has a significant hurricane exposure, and between 5% and 20% nationwide, the brokerage reported.

Loss-free catastrophe programs renewed flat to 7.5% higher in Florida and flat to 5% higher nationwide, the Willis Re 1st View report said.

In Florida, reinsurers that rely on retrocessional coverage and alternative market capacity showed a “reduced appetite,” but reinsurers “with large balance sheets — and those less reliant on retro — grew existing relationships and added new cedents,” the report said.

U.S. casualty reinsurance rates also increased, the report said. General liability excess-of-loss reinsurance rates increased 5% to 15% for accounts with losses and were flat to 5% up for accounts without losses emerging; auto liability rates were flat to 10% higher for accounts with losses and flat to 7.5% higher for accounts without losses; and professional liability rates were flat to 5% higher for accounts with losses and were minus 5% to flat for accounts without losses.

Increases were also seen in other regions, the report said. “Most territories and classes are seeing price increases and some tightening in terms and conditions,” the report said.

But the reinsurance increases “are being outstripped by more significant changes in primary markets. The impact of global commercial carriers and Lloyd’s (of London) OK? repositioning their portfolios, in terms of price, conditions and capacity, is flowing through into most territories and classes,” the report said.


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