Middle East: Volume drives 1/1 property reinsurance season
Source: Middle East Insurance Review | Feb 2020
Volume has been the key driver in property reinsurance business during the 1 January renewal period, said Willis Re in its latest 1st View renewals report.
It added that cedants with large volumes have managed to achieve increased capacities in some instances.
Other developments in the latest renewal season in the Middle East are:
- Pro-rata treaty conditions have remained largely flat. There have been some relaxing of wording restrictions, but the financial terms have largely remained unchanged;
- Loss-free excess-of-loss covers have seen -5% to -7.5% discounts despite initial attempts by the reinsurers to increase prices; and
- Loss-affected excess-of-loss covers have seen a risk-adjusted price increase of approximately +5%.
The report also noted that the 1 January property reinsurance season in Turkey had the following features:
- A reversal of historic trend saw the Turkish lira strengthen, prompting higher limit demand for Euro-denominated property excess-of-loss programmes;
- Increased spend provided some price relief to buyers with overall risk-adjusted movement flat, following two consecutive years of increase;
- Proportional property treaties saw little evidence of increased support despite projected improvement in underlying earthquake rates following the implementation of a new seismic hazard map; and
- The launch of state reinsurer Turk Re introduced significant new proportional capacity to the market.
Issued three times a year, the report delivers the very first view on current market conditions within the global reinsurance industry, covering the changes in pricing levels and conditions experienced by Willis Re brokers and product experts. M