- World Economic Forum(WEF) Global Risks Report 2019 highlights worsening international relations hindering action across a growing array of serious challenges
- Comments on Brexit vote impasse
- Allianz Risk Barometer highlights cyber and concerns around Brexit as as top risks in UK
- Willis Re's Summary of Natural Catastrophe Events 2018 report estimates insured losses from major natural catastrophes at around $71.5bn
- BIBA highlights opportunities for business in 2019 Manifesto
- UK Comprehensive car insurance prices fell by 6% in 2018 says Confused.com/ Willis Towers Watson analysis
- Insurance Europe concerned that the European Commission’s proposal for an ePrivacy Regulation could hamper insurers’ ability to offer innovative insurance policies to consumers expired
- ArgoGlobal collaborating with broker Axieme and digital platform Jobby in Italy to respond to a need for on-demand, pay-as-you-go insurance for temporary and short-term workers expired
- LV= General Insurance successfully deploys Guidewire Core and Data solutions in the largest transformation the business has ever undertaken expired
- Marsh announces that it had placed more than 10,000 risks in 2018 through Placing Platform Limited(PPL)-over 15,000 in total expired
- ZhongAn and Grab to establish joint venture company to enter the digital insurance distribution business in Southeast Asia expired
- Greenlight Capital Re becomes largest shareholder in Chicogo-based MGU AccuRisk expired
12th September 2018
Hannover Re says market environment in worldwide property and casualty reinsurance remains challenging
The market environment in worldwide property and casualty reinsurance remains challenging, says Hannover Re. The enormous natural catastrophe losses of the past year led to an increase of reinsurance rates in affected regions and programmes, which however were lower than expected. At loss-free programmes, rates tend to stabilize.
Competition continues to be intense and is clearly shaping the pricing situation. At the same time, the capital resources available to most insurers can be described as good, as is also reflected in retention levels. These are still high, suppressing demand for reinsurance coverage. The ILS(insurance-linked securities) market also continues to provide considerable capacities, adding to the pressure on prices and conditions.
A gradual shift in sentiment can nevertheless be discerned in the industry. The results posted by some companies deteriorated sharply in 2017. Some reinsurers' results in 2018 were also impacted by follow-up losses from natural disasters. Furthermore, diminished run-off profits must be expected. Rising inflation-fuelled in part by new trade barriers-is pressuring the industry to increasingly implement rate adjustments in some segments.
Merely moderate rate increases overall have so far emerged out of the price negotiations within the year. In the case of natural catastrophe business, which had been hard hit in the previous year, more appreciable mark-ups were nevertheless recorded for loss-impacted treaties. All in all, the rate quality in the reinsurance market is slightly improved year-on-year, albeit remaining on a low while still adequate level.
"The further development of the loss amounts from last year's hurricanes as well as the minimal large losses incurred in the current year to date will be crucial in determining prices in property and casualty reinsurance", ceo Ulrich Wallin commented during a press conference in Monte Carlo. "The lower the strains from catastrophe losses turn out to be this year, the more difficult it will be to push through requisite additional price increases in the coming year. Nevertheless, we are seeing strong demand and hence rather favourable opportunities for growth in certain segments."
Hannover Re anticipates increasing demand in, among other areas, covers for cyber risks as well as solutions designed to provide solvency relief under structured reinsurance.
For the treaty renewals as at 1st January 2019 the Group therefore expects-despite the overabundance of reinsurance capacity-stable prices and conditions for the most part. Similarly, an industry-wide softening in profitability as well as a higher burden of attritional losses point to a need for improved market conditions.
Hannover Re Trends(189 articles)