Global: January renewals reflect a healthy but bifurcated market
Source: Middle East Insurance Review | Feb 2022
The 1 January renewals reflected a healthy but evolving market as reinsurers adjusted risk appetite and pricing thresholds for certain sectors in response to ongoing and emerging challenges, according to Guy Carpenter.
The changing nature of risk fundamentally influences reinsurers’ view of pricing and capacity allocations, said Guy Carpenter president and CEO Dean Klisura. “It is clear from the 1 January renewals that strategies are adjusting to account for these factors. Cedents’ views, supported by portfolio data, will continue to drive renewal outcomes.”
The risk and reinsurance specialist said in a statement that key aspects of the 1 January 2022 renewals included placements that were ultimately orderly once terms were issued and market participants effectively traded through the dynamic environment. It also stated that differentiation continued to increase across reinsurers’ views of risk and focus on individual placement characteristics.
Moreover, conditions were bifurcated between non-loss-impacted and loss-impacted programmes where those impacted by loss or presenting greater risk to reinsurers experienced more protracted and challenging renewals.
Price dependent, capacity was ample across most lines, although it was more constrained for retrocessional and frequency-exposed property as well as cyber aggregate programmes. The renewal process was later than normal in some sectors including property, lagging up to 14 days behind typical timings for the period.
Overall, there was ample capacity in the global property sector to complete programmes, with greater market appetite for non-loss-impacted upper layers. Capacity was more constrained on lower layers, aggregates, multi-year and per risk, particularly if loss impacted. On the global casualty front, portfolio performance and underlying rate movement were critical factors at renewals. M