After years of declines, January reinsurance renewals finally turned in the other direction in an upward trend that will continue throughout 2018, according to a new Standard & Poor’s report.

“Reinsurance prices reached an inflection point during the January 2018 renewal season, and we continue to expect average price increases of [0 percent to 5 percent] across the board through the year,” S&P said.

This trend began with global reinsurance pricing at January 2018 renewals, which ranged from flat to about 5 percent higher. S&P noted that specific increases varied “by line of business, whether the policy had experienced any losses and region,” as per its expectations.

The flat-to-single-digit rate increases come after natural catastrophes—ranging from hurricanes to wildfires and earthquakes—caused a record $130 billion in insured losses globally during the 2017 second half.

One thing also became clear in the wake of the record natural catastrophes late last year: alternative capital performed well.

While there was some uncertainty about whether alternative capital would be readily available during the onslaught of natural catastrophes, Standard & Poor’s said that January renewals were orderly and alternative capital faced no disruptions.

“Given the magnitude of losses suffered and that the subsequent capital raises went off without a major hitch, we believe alternative capital has passed its stress test and continues to come of age,” the report stated.

Standard & Poor’s said it will continue its stable outlook on the global reinsurance sector, as it sees reinsurers displaying continued “strong enterprise risk management programs, still-rational underwriting and still-robust capital adequacy.”

To be determined, according to the report: whether reinsurance price increase momentum will continue beyond 2018.

Source: Standard & Poor’s