(Reuters) – Rating agencies Moody & # 39; s and S&P Global said on Tuesday that they expected global reinsurance premium rates to rise in the most important renewal season in January, as companies try to get back some of their COVID-19 related losses.
The pandemic is expected to result in as much as $ 100 billion in losses for non-life insurers due to claims from companies affected by cancellation of events and other disruptions.
Reinsurance companies share the burden of large losses with insurers in return. for part of the premium.
Reinsurance rates were on a downward trend in recent years due to strong competition until large losses from natural disasters in 201
Interest rate hikes in January 2021 are likely to be in the "high single digits" of percentage points, Moody & # 39 ;s analyst Antonello Aquino told a media presentation, while S&P Global analyst Charles-Marie Delpuech told a separate review that the company & # 39 ;s expected pace increases in the middle of the single digits. [1 9659002] Fitch Ratings also said last week that the expected rise in interest rates in the low doubtful percentage area.
Global reinsurer Swiss Re also said on Tuesday that it was optimistic for renewals and expected price increases in all segments to continue to be driven by low interest rates, large claims and growing risks.
Credit rating agencies were disappointing in terms of the prospects for reinsurers, given COVID-19 as a result of their profitability.
Moody & # 39; s lowered its global reinsurance outlook to negative from stable. on Tuesday, citing the pandemic and the subsequent economic downturn, as well as the long-term effects of climate change on natural disaster losses.
S&P Global maintained a negative outlook for the sector.
The rating agencies usually update their outlook. ahead of an annual reinsurance event in Monte Carlo every September. The event will be canceled this year. Catalog