Later than usual Jan. 1 reinsurance renewals differentiated sharply between loss-affected and non-loss-affected programs as capacity was constrained in lower layers affected by catastrophe losses as well as the retrocessional markets, according to a report from Guy Carpenter & Co. LLC on Monday.

In property markets, non-loss-impacted business was generally flat to up 7%, with loss-impacted up 10% to over 30%. Capacity was “sufficient … with more market appetite for non-loss-impacted upper layers,” and was more constrained on lower layers, especially if loss-impacted.

Guy Carpenter’s projected annual large loss total rose to over $100 billion including nearly $30 billion of estimated loss for Hurricane Ida. The Guy Carpenter global property catastrophe rate-on-line index increased 10.8% year-on-year.

In casualty lines, capacity was generally sufficient but results varied by line with financial lines seeing the most reinsurer appetite and cyber aggregate coverage the most challenged. Continued primary rate increases across casualty lines helped drive increases in quota-share ceding commission increases ranging from flat to up 1.5 points for excess casualty and flat to up 2.5 points on financial lines.

A “challenged” sidecar market saw several insurance-linked securities managers withdrawing capacity and helped limit retrocession capacity even as the catastrophe bond market saw a record year as 45 bonds were brought to market for more than $11.5 billion in limit placed in 2021.

While describing the process as “orderly,” Guy Carpenter said, “the renewal process was later than normal in some sectors including property, lagging up to 14 days behind typical timings for the period.”

The weighted average combined ratio for the Guy Carpenter Reinsurance Composite improved by 4.7 points to 98.7% for the first nine months of 2021 and is on track to finish below 100% for 2021, compared with full-year 2020’s 103.4%. Guy Carpenter and A.M. Best estimate total dedicated reinsurance capital at $534 billion, a 2.8% increase from year-end 2020.

“The changing nature of risk fundamentally influences reinsurers’ view of pricing and capacity allocations. It is clear from the January 1 renewals that strategies are adjusting to account for these factors,” said Dean Klisura, president and CEO of Guy Carpenter.