Reinsurance Price Hike Momentum Slowed at June, July Renewals

June and July reinsurance renewals saw pricing momentum slow compared to January renewals, particularly for non-loss-impacted placements, according to a new report from Aon.

Aon's Reinsurance Market Outlook July 2021 noted that June and July are significant property reinsurance renewal dates, with property pro rata and catastrophe excess of loss contracts renewing in the United States, large catastrophe programs renewing in Australia, and renewals in Europe, the United Kingdom, Latin America, and the Middle East.

The slowing pricing momentum at June and July reinsurance renewals continued a trend from April, the Aon report said.

The report noted that reinsurers reported solid earnings during this year's first quarter, ending the quarter with a combined ratio of 96.6 percent, in part because of previous rate increases. Meanwhile, global reinsurance capital remained flat compared to the fourth quarter of 2020 at $650 billion. Alternative capital offset a small reduction in traditional capital, according to Aon.

Contract terms continued to be a strong focus at renewals given the reinsurance market's evolving response to communicable disease exposures as a result of the COVID-19 pandemic, the Aon report said.

Casualty reinsurance placements saw more aggressive insurer language at renewals as a result of relatively ample capacity in the reinsurance market, according to Aon.

Second-quarter property catastrophe reinsurance losses totaled $36 billion, Aon reported, a figure slightly above the median and below the average of the last decade. Those losses were driven in large part by US winter freeze events that caused an estimated $14 billion in losses, Aon said.
Reinsurance Price Hike Momentum Slowed at June, July Renewals