Rates

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.

Terms are expected to hold, underpinning the stronger recent performance of reinsurers.

Dedicated reinsurance capital is on track to increase by 8% in 2025, the broker said.

Last year marked the second consecutive year in which carriers made a positive return.

The reinsurer’s chair said cat pricing reductions are at a “miniscule level”.

The model becomes the second in the state to get approval to affect ratemaking applications.

The investment consultancy said yields increased in Q2 by less than could have been expected.

The cost comes in at $530.6bn, roughly $20mn lower than budgeted.

Florida’s top regulator says he’s eyeing eventual tweaks to the state’s cat fund, too.

The rating allows IQUW to access $1bn in group capital.

Compressed cat bond spreads could drive some rebalancing, as M&A remains a prospect.

Twia filed for the rate hike in August after an actuarial analysis showed that rates were inadequate.

The rate change will be implemented in November.

The board of directors has voted for a 10% rate hike.

The Citizens board approved the increase in June.

Twia’s analysis showed existing rates were inadequate.

The broker estimated ILS capacity reached a record $107bn as cat bond interest surged.

The proposal now goes to the Florida Office of Insurance Regulation for review.

The ratings agency noted robust profit margins for reinsurers.

Top layer competition is an added pressure on ILS firms, but the impact can be overstated.

The firm received a long-term ICR of a- and the outlook for both ratings is stable.

European rates on line increased by 7.60%, while in the US prices were up 5.25%.

The broker’s report also hailed the best risk-adjusted margins for ILS investors in a decade.

The broker’s 1st View report predicted that cat bond issuance should remain elevated until at least Q2 2024.

Reinsurers are making some adjustments to secure target signings but appetite to grow is finely balanced.

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.

Anticipations of a tug-of-war around a ‘flat to slightly up’ pricing renewal have indeed come to fruition.

Profits are expected to widen thanks to improved rates and higher average attachment points.

TWIA has raised its net operating expenses to $40.2mn.

E+S Rück said that natural disasters and persistently high inflation have again "taken a toll" on the German insurance industry.

Fermat’s John Seo said the industry can “see the wall of money coming in, but it’s coming in slowly”.

Prabis does not envisage market softening at this stage, for reasons including wider macroeconomic impacts.

The downgrades reflect the negative impact of challenging macro-economic trends on underwriting results and risk-adjusted capitalization.

Board members voted five to four in favor of rate increases but fell short of the two-thirds majority required.

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.

The CEO said Chubb has ‘never seen better pricing’ on primary property.

Loss-free accounts were generally up 20%-50% at renewal, the reinsurance broker said.

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.

The carrier is increasing underlying rates to counter increased reinsurance costs and inflation.

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.

Some cedants paid more than 40% increases depending on Florida concentration and Hurricane Ian losses.

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.

Early private deals have provided far more stability in this year’s renewal than last.

Softening cat bond rates are among the bearish signals for cat rates, but latent new demand and still-cautious supply should prolong reinsurer gains.

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.

Capital has begun to flow again after a challenging time for ILS fundraising in 2022 – but there is a clear shift underway.

The recommendations await approval from the Florida Office of Insurance Regulation.

Reinsurers are also increasing their attention on per-risk contracts protecting Japanese interests abroad.

A trend for slightly riskier bonds has brought with it a rise in the absolute margin on offer.

Hamilton Re said early signs point to 25%-30% rate rises on Japanese wind.

This was the highest single-year increase for the US index since 2006.

This price hike contributed to a premium increase of $695mn in the month, bringing the year-to-date impact of 2022 rate increases to $3.6bn.

High-yielding alternatives are taking away attention from this sector, with its complex narrative around recent losses, and diversification only goes so far in selling its story.

Expansion is set to be a trend across Lloyd’s as syndicates look to capitalise on a hardening market.

Early reporters emphasised an ongoing demand for structural change.

Winter storms in the first half of 2022 are expected to result in claims totalling EUR1.4bn.

Reinsurers and brokers alike have warned of a rocky 1 January renewal process ahead as the industry grapples with multiple issues including inflation, climate change and geopolitical uncertainty.

The reinsurer is working to find the right inflation indicators for individual client portfolios.

The ratings agency predicts a combined ratio of 95.2% for the companies on its watch this year.

The broker said some reinsurers were planning for significant growth in property catastrophe as demand is expected to pick up pace.

A report warns that recent rate increases may not be enough to protect against headwinds.

A Moody’s survey of reinsurance cedants found most are expecting cat rate increases to remain in a high-single-to-low-double-digit bandwidth.

Demotech wrote to more than 15 carriers to warn of a possible downgrade last month.

The Florida senator described the agency’s market influence as “deeply troubling”.

The start-up’s top team predicted further rate hardening at 1 January.

Joe Petrelli said Demotech would continue to follow its independent methodology, despite outside pressure.

The forecast for real-term premium growth was depressed by anticipated claims inflation.

The state-backed carrier has seen massive growth in the distressed Florida market.

Rates have climbed 20%-35% since 1 January, and 40%-50% year on year, sources estimated.

Overall, the CIAB Q1 survey recorded rates were up 6.6% in Q1.

The Floridian carrier must improve its financial strength rating ahead of its 1 July reinsurance renewal.

Downgrades are expected to be announced next week for some Florida carriers that are “already winding down”.

There is a tension between securing payback and negotiating higher retentions.

Wind excess-of-loss treaties renew with gains between 2% and 5% in “underwhelming” renewal.

The carrier expanded premium by 8.3% at the January renewal.

There is a lack of capacity for aggregate deals, and moves towards more named peril coverage.

Inflationary pressure and climate change meant the market effectively gave ground to cedants despite nominal price rises.

The firm has been in run-off since late 2020, and another former Credit Suisse affiliate was recently sold to legacy writer Marco.

European loss experience drove the firm’s index back in line with 2014 levels.

Noting concerns about rapid growth, the Citizens board approves rate hikes up to the legal limit.

The projections are slightly worse than they were three months ago, as heightened cat losses and Covid-related pressures impact rates.

S&P suggested that an “abrupt rethinking” was a more likely outcome than gradual pricing increases – but a third way is possible if ratings agencies set a glidepath to change.

The Hannover Re subsidiary said the event would incur insured losses in Germany alone of “well in excess” of EUR8bn.

The state body supporting earthquake cover has seen risk transfer requirements swell over the past decade.

Strategic Review Committee chairman Bruce Simberg sets out the challenge ahead for FedNat as natural catastrophes continue to hit southern policyholders.

Moody’s expects RMS, which had about $320mn in revenue around $55mn in operating income last year, to become accretive to earnings by 2025.

Environmental, social and governance (ESG) factors were the primary driver in 13% of ratings actions in the year to the end of March, according to AM Best.

The new adjustments will increase rates 7.6% on average after February 1, 2022.

Rates are still more than 40% ahead of the pre-Hurricane Irma trough in late 2016.

Willis Re international chairman James Vickers said that the ILS market played a strong role in the Florida renewals, but it was becoming more difficult to judge the overall impact of the sector as more capacity stays behind rated balance sheets.

The broker said a buoyant ILS market contributed to the reinsurance market nearing a new equilibrium at the end of mid-year renewals.

The intermediary also warned that inflation headwinds could affect the future cost of claims.

There is little sign of retro demand returning after buyers cut back in January.

The first-time ILS sponsor expects to pay a coupon at the lower end of its initial forecast.

Pockets of the distressed Florida market are still expected to face a challenging renewal, but much of the remediation was carried out last year.

Spreads have fallen 14% on a weighted average basis on new deals marketed in the quarter to date.

Cat bond market exuberance seems to be mismatched against overall ILS sentiment.

The French carrier grew its top line by 14.3% at the April renewals.

The market has reached the stage of price hardening at which clients will challenge brokers and carriers on continuing increases, according to Aon president Eric Andersen. 

Christopher Swift says more rate is needed in some areas including the London market and certain excess lines.

Assets under management at the sidecar rose 12.5% year-on-year to $900mn by the start of 2021

The carrier predicts Covid’s reinsurance impact will drive market hardening.

The carrier maintains its 2021 profit forecast amid 8.5% 1 January premium growth.

The intermediary cited Convex and Vantage among new entrants adding capacity to the market at the renewal.

Property insurance rates are rising by high single digits to 15% on clean accounts.

The carrier is legally obligated to sell cover at “actuarially sound rates”.

US contracts are still pricing at a 10%-15% premium to January 2020 levels, but excess retro capacity may impact the smaller market.