Rates
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Investor interest is warming up following a colder spell over the past several years. -
While rates have “definitely come down,” they were coming off a high base, Rachel Turk said.
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Terms are expected to hold, underpinning the stronger recent performance of reinsurers.
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Dedicated reinsurance capital is on track to increase by 8% in 2025, the broker said.
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Last year marked the second consecutive year in which carriers made a positive return.
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The reinsurer’s chair said cat pricing reductions are at a “miniscule level”.
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The model becomes the second in the state to get approval to affect ratemaking applications.
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The investment consultancy said yields increased in Q2 by less than could have been expected.
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The cost comes in at $530.6bn, roughly $20mn lower than budgeted.
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Florida’s top regulator says he’s eyeing eventual tweaks to the state’s cat fund, too.
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The rating allows IQUW to access $1bn in group capital.
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Compressed cat bond spreads could drive some rebalancing, as M&A remains a prospect.
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Twia filed for the rate hike in August after an actuarial analysis showed that rates were inadequate.
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The rate change will be implemented in November.
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The board of directors has voted for a 10% rate hike.
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Twia’s analysis showed existing rates were inadequate.
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The broker estimated ILS capacity reached a record $107bn as cat bond interest surged.
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The proposal now goes to the Florida Office of Insurance Regulation for review.
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The ratings agency noted robust profit margins for reinsurers.
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Top layer competition is an added pressure on ILS firms, but the impact can be overstated.
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The firm received a long-term ICR of a- and the outlook for both ratings is stable.
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European rates on line increased by 7.60%, while in the US prices were up 5.25%.
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The broker’s report also hailed the best risk-adjusted margins for ILS investors in a decade.
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The broker’s 1st View report predicted that cat bond issuance should remain elevated until at least Q2 2024.
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Reinsurers are making some adjustments to secure target signings but appetite to grow is finely balanced.
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Projected 2024 ILS returns remain historically high, but signs of increased appetite for top-layer cat risk and top-end retro raise questions over how long this will last.
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Anticipations of a tug-of-war around a ‘flat to slightly up’ pricing renewal have indeed come to fruition.
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Profits are expected to widen thanks to improved rates and higher average attachment points.
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TWIA has raised its net operating expenses to $40.2mn.
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E+S Rück said that natural disasters and persistently high inflation have again "taken a toll" on the German insurance industry.
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Fermat’s John Seo said the industry can “see the wall of money coming in, but it’s coming in slowly”.
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Prabis does not envisage market softening at this stage, for reasons including wider macroeconomic impacts.
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The downgrades reflect the negative impact of challenging macro-economic trends on underwriting results and risk-adjusted capitalization.
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Board members voted five to four in favor of rate increases but fell short of the two-thirds majority required.
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The ratings agency is currently in discussions with Clear Blue’s management regarding the company’s ability to replace certain programs or letters of credit.
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The CEO said Chubb has ‘never seen better pricing’ on primary property.
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Loss-free accounts were generally up 20%-50% at renewal, the reinsurance broker said.
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The firm’s 1st View report on the July renewals also flagged that an oversupply of ILW capacity may bring down attachment points relative to early 2023.
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The carrier is increasing underlying rates to counter increased reinsurance costs and inflation.
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Considering recent reforms, Citizens’ rates, on average, are still 58.6% below actuarially sound levels, but the inadequacy would have been 88.3% without them.
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Some cedants paid more than 40% increases depending on Florida concentration and Hurricane Ian losses.
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Even clean accounts in the admitted space are seeing rate increases of 15% year on year, while loss-hit accounts in Florida were slapped with a 100% rate increase for June 1.
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Early private deals have provided far more stability in this year’s renewal than last.
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Softening cat bond rates are among the bearish signals for cat rates, but latent new demand and still-cautious supply should prolong reinsurer gains.
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The pace of rate hikes will ease back from the 1 January reset as buyers seek to lock up capacity early after last year’s dislocated renewal.
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Capital has begun to flow again after a challenging time for ILS fundraising in 2022 – but there is a clear shift underway.
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The recommendations await approval from the Florida Office of Insurance Regulation.
