Key findings from the report:
1 April renewals saw the continuation of a broadly flat pricing environment
Rapid reload of Insurance Linked Securities (ILS) funds following initially overstated Hurricane Harvey, Irma and Maria (HIM) losses
Continued capital oversupply despite 2017 losses
Some modest increases in reinsurance purchases allied to underlying growth delivering real premium growth
Dynamic change in reinsurance mergers and acquisitions (M&A); large primary carriers have re-entered the reinsurance market, driven by disruptive competition in personal lines and profitability challenges in life insurance
Insurance companies continue to assess the impact of reinsurance buying to support earnings and capital management, with the value of reinsurance seen as higher than it has been in recent years.
James Kent, Global CEO, Willis Re, said: “The pricing environment for the April renewals has closely mirrored that of the 1 January placements, with pricing dampened by the continued impact of plentiful capacity from both traditional and ILS markets, and with the latter’s impact most apparent on property catastrophe pricing.
“M&A in the sector, driven by large primary insurers returning to the reinsurance space, has also helped to keep capital plentiful, meaning that it remains a buyer’s market. However, reinsurers can take some solace from the fact that the annual price declines of recent years have abated. We are also seeing a pick-up in demand as a result of exposure growth, plus an increase in buying activity, most noticeably from some large global clients.”
The Willis Re 1st View report is a thrice yearly publication including specific commentary on key trends throughout the world’s major reinsurance classes and regions.
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