Global property catastrophe reinsurance rates rose between 10% and 50% during the July 1 renewals, with even higher rates for insurers incurring losses on their reinsurance programs, Guy Carpenter & Co. said. LLC in a report on Wednesday.
In the U.S., property reinsurance cedants paid between 20% and 50% more for coverage, the reinsurance broker said.
The mid-year interest rate hikes follow steep increases in June, April and January renewed reinsurance. Reinsurers cut capacity and raised rates this year, citing losses from Hurricane Ian in 2022 and past disasters.
“While capacity and aggregates in lower tiers remained very limited, new capital raised by existing market players and growing appetite of other established reinsurers saw overall capacity levels recover,”; the report said.
Catastrophe bonds saw strong demand from investors in the first half of the year, the report said. As of June 30, 41 cat bonds were placed, with $9.2 billion in total limits. The average limit for the past five years was $6.5 billion.
Recent reports from Gallagher Re and Aon PLC also showed significant rate increases for reinsurance.