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Increases in the reinsurance ratio: S&P



The reinsurance rate for real estate / accident insurance on January 1, 2021 was lower than expected, as reinsurers raised capital in 2020, which strengthened the cedants' bargaining power and repulsive interest rate increases, according to a report by S&P Global Ratings Inc.

, with infectious diseases and silent cyber exceptions gained increased focus.

Reinsurance pricing trends are higher and have increased over the past two years, but at the end of the year increase, was "lower than reinsurers had hoped," the report says. % to 25%, while non-cat exposed accounts without losses were flat up to 15%, S&P data showed.

In the UK, accounts with losses were seen with 5% to 1

5% interest rate increases and for the whole of Europe losses increased by 5% to Some loss-free accounts increased minimally in the UK and continental Europe.

Increases were limited in part by $ 15.4 billion of new capital raised by reinsurance companies, along with $ 8.2 billion in debt, according to S&P. "This proved to be a negotiated advantage for reinsurance buyers," said S&P.

Police language received as much or more attention as interest rates, say r report. Exceptions from infectious diseases were generally accepted on short tail lines, but "were relatively less accepted" with long tail lines.

Retrocessional reinsurance capacity was enhanced by capacity from insurance-related securities.

"Despite significant interest rate increases and overall limited capacity, buyers were able to purchase protection through record issuance of emergency bonds and from certain traditional reinsurers who were willing to provide coverage due to improved pricing," the report says.

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