The recent reinsurance renewal price hikes may be passed onto customers is a view shared by many market figures who spoke exclusively to Insurance Times.
April renewals experienced dramatic price hikes in the reinsurance market, which was driven by inflation, geopolitical uncertainty and the growing prevalence of natural disasters.
Leading reinsurers saw price increases on their reinsurance treaties. Hannover Rereported in Feb 2023that it experienced averaged price increases of 8% on the reinsurance treaties it renewed.
Reinsurers’ rates and expectations around the level of risk accepted by insurers “had increased dramatically” according to David Ovenden, CUO of AXA Commercial, speaking to Insurance Times.
“Prices rises vary widely depending on the line of business, portfolio mix and attachment point, with minimum rates for upper layers seeing the biggest increases”, he added.
The concern among many in the market is whether these costs can be absorbed by insurers or will be passed onto consumers.
As dust settled on renewals, it is a good moment to examine some of the trends that have emerged .
Gallagher Re, in the Gallagher Re 1st view report on the April renewals, noted that the April renewals were like January 1 renewals, with a more intense focus on pricing and contractual improvements across all territories and to all business lines.
The report highlighted a growing concern in the US Casualty class, regarding US ‘nuclear’ award verdicts that are increasingly shining a light on US casualty placements, including some treaties with incidental US exposures.