Reinsurance renewals marked by continued rate hardening: Howden
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London-based Howden Broking Group Ltd. said Thursday said June 1 reinsurance renewals saw continued rate hardening, with risk-adjusted property/catastrophe pricing up 33% on average within a typical range of 25% to 40%.
Capacity shortages continued to drive increased pricing, as loss-affected programs saw increases exceeding 40% as memories of Hurricane Ian losses remained fresh, Howden said. Higher coverage layers also saw increases in excess of 40% year over year for both earthquake and wind cover.
Wade Gulbransen, Head of North America, Howden Tiger, said in a statement the increases marked a “once-in-a-generation market.”
Lower layers remained challenging, also, with cedents increasing retentions and, in some instances, altering underwriting guidelines, according to Howden.
Macroeconomic factors including financial market volatility, inflation and geopolitical tensions also weighed on renewals, Howden said.
“Although dedicated reinsurance capital has recovered somewhat since its low at the beginning of the year, challenges persist with historically high catastrophe losses, heightened geopolitical and financial risks, and increased connectivity converging to create a climate of amplified risk aversion.” David Flandro, Head of Industry and Strategic Advisory, Howden Tiger, said in the report.
The challenging market conditions had parties out as early as January, with placements beginning in March, Howden said.
“In summary, risk-adjusted property/catastrophe pricing at 1 June has reached new highs with multiple factors altering the landscape of risk management. Low – albeit recovering – levels of dedicated capital persist,” Howden said.
