Contrasting realities for 2019 reinsurance renewals: Willis Re 1st View
LONDON, Jan. 02, 2019 (GLOBE NEWSWIRE) -- Reinsurance placements at 1 January 2019 highlight a pricing gap between accounts with peak peril exposures or poor loss records and the rest, with many reinsurers placing emphasis on the quality of client counterparties, according to the latest 1st View renewals report from Willis Re, the reinsurance division of Willis Towers Watson, the leading global advisory, broking and solutions company (NASDAQ:WLTW).
A two-track trend has been especially evident in property catastrophe renewals, where cedants with good loss records and a disciplined, early renewal process achieved risk-adjusted rate reductions, while loss impacted accounts and clients viewed as of lesser quality are seeing upward pricing across a number of lines.
The ILS market faces a more comprehensive test in the absence of a major pricing uptick following significant loss erosion for some funds in both 2017 and 2018. Some funds are challenged in attracting new investors, and those with long-standing and successful track records, consistent and well-regarded management teams, and flexible trust language or fronting agreements are the ones best equipped for success.
Adjustments to business models initiated over the year have taken on an increased urgency, including the well-documented changes within the Lloyd’s market. The upshot is that some primary lines are seeing significantly larger rate increases than treaty reinsurance business.
Reinsurers have benefited from increases in premium ceded by large carriers, notably through large new pro rata cessions where terms have slightly tilted in reinsurers’ favor. At the same time, major reinsurers’ strength and client-centric flexibility remain key to large cedants’ goal of dampening earnings volatility.
James Kent, Global CEO, Willis Re, said: “In the immediate aftermath of the 2017 catastrophe losses, many observers felt the measured reaction of the reinsurance market was a clear sign of a changing structure and maturity. Others more cautiously suggested time was needed to properly assess the impact of 2017 events. In the wake of the high loss activity during the second half of 2018, early renewal negotiations have proved prudent, while pricing in the primary market has given reinsurers some cause for optimism in light of the increased pro rata cessions from clients.”
Download the full report: Contrasting Realities for 2019 reinsurance renewals
About Willis Re
One of the world’s leading reinsurance brokers, Willis Re is known for its world-class analytics capabilities, which it combines with its reinsurance expertise in a seamless, integrated offering that can help clients increase the value of their businesses. Willis Re serves the risk management and risk transfer needs of a diverse, global client base that includes all of the world’s top insurance and reinsurance carriers as well as national catastrophe schemes in many countries around the world. The broker’s global team of experts offers services and advice that can help clients make better reinsurance decisions and negotiate optimum terms. For more information, visit willisre.com.
About Willis Towers Watson
Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has over 40,000 employees serving more than 140 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.
Annie Roberts: +44 203 124 7080