BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Reinsurance market sees broad range of price hikes

Reinsurance market sees broad range of price hikes

Reinsurance prices have risen over the past several months, but the level of increases varied widely, experts say.

In addition, the inclusion of communicable disease exclusions depends on the type of coverage offered, they say.

Recent reinsurance renewals have seen a range of results, said Doug May, Seattle-based president of Willis Re North America, a unit of Willis Towers Watson PLC.

He was speaking during a panel discussion at the annual meeting of the American Property Casualty Insurance Association, which was held online due to the pandemic.

A sample of property/catastrophe reinsurance placements from April 1 to July 1 a variation in rate increases, Mr. May said.

The Florida market was up 20% to 35%, Mr. May said, and July renewals increased by more than 20%.

There was also tremendous differentiation in the layering of increases, Mr. May said.

About 10% of renewals were “pretty flat,” about 35% experienced a less than 15% increase, another 35% were up 15% to 30% and about 20% were up more than 30%, he said.

“That was unprecedented,” Mr. May said. “We had never seen that kind of pricing variation before. That says that this market is very much an individual market.”

Much of the variation depends on individual cedents, said Will Garland, president of the North America centers of excellence for Guy Carpenter & Co. LLC in New York.

For casualty reinsurance, Guy Carpenter saw increases of 5% to 20%, while financial lines were “generally flat,” he said.

Terms and conditions also changed during the pandemic.

“From a property perspective, clearly the discussion circles around the communicable disease exclusions,” Mr. Garland said. They’ve become standard for commercial lines exposed treaties.”

Casualty reinsurance, however, has seen a “much more nuanced approach,” Mr. Garland said.  Communicable disease exclusions are only seen in select areas such as workers compensation.

The biggest change in the renewal process, Mr. May said, is the use of private layers. In a hard market, “certain capacity providers” will negotiate with individual cedents. This is prominent in the Florida market, he said.

Cedents want to be “differentiated,” judged on their own performance and individual merits, and not “painted with a broad brush,” Mr. Garland said.