Later than usual on January 1, reinsurance renewals severely differentiated between loss-making and non-loss-making programs because capacity was limited in lower strata affected by disaster losses as well as retrocessional markets, according to a report by Guy Carpenter & Co. LLC in Monday.
In the real estate markets, the non-loss-making business was generally unchanged at up to 7%, with a loss-making effect of up 10% to over 30%. Capacity was "sufficient … with more market appetite for non-loss-making top tier," and was more limited at lower tier, especially on loss-making.
Guy Carpenter's estimated annual large loss amount rose to over $ 100 billion including nearly $ 30 billion of estimated loss for Hurricane Ida. Guy Carpenter's global real estate disaster index increased by 1
In accidents, capacity was generally adequate, but results varied by line of financial lines, which saw the most reinsurer's appetite and cybercrime coverage. most challenged. Continued increases in primary interest rates over accident lines contributed to increases in increases in quota share transfer commissions from unchanged to up to 1.5 points for extra damage and unchanged to up to 2.5 points on financial lines.
A "challenging" sidecar market saw several insurance Trustee in linked securities withdrew capacity and helped limit retrocession capacity even when the emergency bond market saw a record year of 45 bonds being released on the market for more than $ 11.5 billion in limits placed in 2021.
While describing the process as "orderly", Guy Carpenter said, "the renewal process was later than normal in some sectors, including real estate, and dragged on for up to 14 days at typical times of the period." 98.7% for the first nine months of 2021 and is about to end below 100% for 2021, compared to 103.4% for the full year 2020. Guy Carpenter and A.M. Best estimate of total dedicated reinsurance capital to USD 534 billion, an increase of 2.8% from the turn of the year 2020.
“The changed nature of the risks fundamentally affects insurers' views on pricing and capacity allocation. It is clear from the renewals on January 1 that the strategies are adjusted to take these factors into account, says Dean Klisura, President and CEO of Guy Carpenter.