Property reinsurance rate hikes reach high double-digitsPosted On: Apr. 3, 2023 12:49 PM CST
Most property rates rose in low to middle double-digit percentages as casualty markets were more orderly but still vexed by concern over “nuclear verdicts,” according to a report on April 1 reinsurance renewals issued Monday by Gallagher Re, the reinsurance business of Arthur J. Gallagher & Co.
In the U.S, loss-free noncatastrophe-exposed accounts saw rate increases of 20% to 40%, while loss hit accounts were up 60% to 100%. Catastrophe-exposed, loss-free accounts were up 30% to 50%, while catastrophe-exposed loss hit accounts rose 50% to 100%.
James Vickers, chairman international, reinsurance, at Gallagher Re, told Business Insurance that April 1 renewals were more orderly than those at Jan. 1 as expectations among counterparties were not as far apart as previously.
Reinsurance renewals in Japan formed the bulk of activity at April, with noncatastrophe-exposed, loss-free accounts up 15% to 20%, while loss hit accounts were up 20% to 50%. Catastrophe-exposed, loss-free accounts were up 15% to 25%, while no range was given for loss hit accounts.
In India, prices rose sharply, with noncatastrophe-exposed, loss-free renewals up 10% to 75% and loss hit accounts up 15% to 160%. Catastrophe-exposed properties saw increases of 25% to 90%, while no range was given for loss hit accounts.
Some coverages drew more scrutiny and subsequent restrictions than others. “Cyber, Communicable Disease, Terrorism, Strike and Riot (SRCC) became a frequent point of discussion with reinsurers seeking to restrict coverage,” the Gallagher Re report said.
Casualty markets, while not roiled by the tumult of the property increases, are “still a concern,” Mr. Vickers said, with positive rate movements in all geographies.
In the U.S., general third-party liability was flat to up 5% for accounts with no loss emergence and 5% to 15% with loss. In Japan, general third-party liability rose 10% to 20% with no loss emergence and 20% to 30% with loss emergence.
Rising litigation exposures remained a concern, the Gallagher report said. “U.S. casualty nuclear awards are increasingly making their presence felt on many U.S. casualty placements, and in some instances on treaties with incidental U.S. exposures.”