Reinsurance interest rates increase by June 1, renewals should be average in the mid-teen percentage, according to a research note Friday from Keefe analyst, Bruyette & Woods Inc.
However, price increases were "very widespread" as differences in individual loss experience led geographical exposure and market newspaper to "cedent-specific increases", says KBW. Adding to the cycle was marked by "improved market discipline" led by reinsurance companies including RenaissanceRe Holdings Ltd.
Analysts also noted that current reinsurance prices "are far below the previous peaks" as "current increases follow June 2018's very modest increase following six consecutive years of compounding ̵
Retrocessional pricing increases by at least 25% KBW said. The analyst noted Markel CATCo, the specialist manager of Markel Corp., "generally regarded as very cheap retrocessional capacity", according to KBW, "allegedly not renewing any business in the middle of the year," said the analyst.  The rising market is due to reinsurance companies' changing views of the risk after two years of significant disaster losses, including material loss "creeps" for Hurricane Irma, Typhoon Jebi, Hurricane Michael, and the insufficient or under-modified losses in California, KBW said in its listing.
Reinsurance capacity is generally considered to be "adequate" according to KBW and insurance-linked securities continue to provide capacity for the reinsurance sector, albeit on a somewhat more selective basis, according to KBW.
"According to all accounts, ILS capacity is still considered a permanent part of the disaster reinsurance ecosystem, although investors are now more selective about the trustees with whom they will co-operate, "the analyst said in the note.