According to the latest 1st View renewals report from ICMIF Supporting Member Willis Re, reinsurers took a measured approach to the April renewals, which saw significant rate increases on loss-affected accounts and more modest rises on loss-free business. The report’s findings indicate that the global reinsurance sector smoothly moved to the new working-from-home model following the COVID-19 outbreak and was able to provide uninterrupted service.
The largest risk-adjusted property price increases were seen on loss-hit catastrophe treaty contracts, which were up +30% to +50% for Japanese wind exposures. Loss-free treaties saw less dramatic rises and, in a handful of cases, renewed as expiring. Capacity provided through insurance-linked securities (ILS) decreased slightly, with occasional examples of funds reducing their 1 April offer due to recent investor redemptions.
Reinsurers’ COVID-19 response was impacted by timing and underlying coverage considerations. Early firm orders were completed without specific exclusionary language. In other cases, several reinsurers sought exclusions. In some cases, these were achieved; in others, buyers provided comfort through letters of understanding, which explained that underlying original polices have no exposure to COVID-19-related losses.
James Kent, global CEO of Willis Re, said, “Having demonstrated its ability to manage the operational challenges of COVID-19 so far, the global reinsurance industry is well placed to demonstrate its ability to manage the longer-term financial challenge and continue with its mission of providing support to primary insurance companies and their policyholders.”
Download the full report: The Willis Re 1st View report is a thrice-yearly publication that includes specific commentary on key trends throughout the world’s major reinsurance classes and regions.