Once again, Jan. 1 reinsurance renewals are indicating pricing declines, but the trend has moderated somewhat.
Property catastrophe pricing fell 3.7 percent at Jan. 1, according to the Guy Carpenter Global Property Catastrophe Rate-on-Line index, versus a 9 percent decline a year ago.
At the same time, Guy Carpenter said that the insurance linked securities space saw pricing decreases as high as 30 percent, something the firm said helped trigger reinsurance price drops as ILS firms dealt with lower issuance later in 2016.
Guy Carpenter CEO Peter Hearn said that the renewal moderation was not exactly a shocking development.
“Although current renewals indicate that the decline in reinsurance pricing is slowing, this moderation was not surprising,” Hearn said in prepared remarks. “The more interesting development may be the continued evolution of coverage and solutions to meet changing client needs.”
Hearn added that “an abundance of available capital and improving analytics tools are essential components to create support” for those advances envisioned to address client needs and demands.
“An innovative mindset,” Hearn said, “is the key to success in today’s marketplace as the increasing complexity of risk brings new levels of uncertainty.”
Further report details:
“Losses were spread through several regions and perils, with no single mega-event driving the increase,” Guy Carpenter noted. “Renewal pricing impacts were localized.”
Source: Guy Carpenter