Rate Movements Moderated by Availability of Capacity as Negotiations Center on Pricing and Terms at January 1, 2021 Renewals: Price increases at the January 1, 2021 reinsurance renewals were moderated compared to initial expectations by abundant capital levels and an increased willingness on the part of reinsurers to deploy capacity in several sectors, according to Guy Carpenter. Hallmarks of the January 1, 2021 renewals included an earlier start, a slower and more complicated quoting process and rigorous contract reviews.
Chart – Strong Growth in Cyber Premium Volume: The following chart, generated from A.M. Best data and research, shows the strong growth in premium volume for the property and casualty (P&C) industry cyber security segment.
Property Renewal Themes at January 1, 2021: Pricing for the property sector generally settled at the lower end of expected increases outside of more constrained segments at January 1. Where placements were loss impacted, particularly in cases where retentions were perceived to be too low, reinsurers held firmer on pricing or structure adjustments.
Chart – U.S. Property Catastrophe Rate-On-Line (ROL) Index – 1990 to 2020: The chart in the link below shows the Guy Carpenter U.S. Property Catastrophe Rate-on-Line (ROL) Index for the period 1990 to 2020.
COVID-19 Coverage Uncertainties and January Renewals: Reinsurance renewal negotiations are delicately poised, with increasing pressure on rates, economic uncertainty and disputes over COVID-19 wordings putting long-standing relationships to the test, according to a recent article in Insurance Day from Massimo Reina, CEO for Continental Europe at Guy Carpenter.
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Video – (Re)insurance Startups – The Class of 2020: As capital continues to be drawn to the opportunity of improved pricing conditions across the (re)insurance market, the emerging class of 2020 (re)insurance startups is expected to bring both long-term and committed solutions to brokers and cedents, according to Lara Mowery, Global Head of Distribution at Guy Carpenter.