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Survey Report

Emerging Equilibrium:
Willis Re 1st View

July 2021 reinsurance renewal trends

Reinsurance|Insurance Linked Securities
Insurer Solutions|COVID 19 Coronavirus

July 1, 2021

Reinsurance rate increases continued for most major lines and territories during the 1.6 and 1.7 renewal period; however, in many cases reinsurers had to accept firm order terms below their initial quotes.

Issued three times a year, this publication delivers the very first view on current market conditions within the reinsurance industry, covering the changes in pricing levels and conditions experienced by Willis Re brokers and product experts.

Key findings

  • Reinsurance rate increases continued for most major lines and territories during the 1.6 and 1.7 renewal period; however, in many cases reinsurers had to accept firm order terms below their initial quotes.
  • Reinsurers’ good Q1 results, generally low catastrophe losses, rising underlying reinsured premium volumes, positive investment trends, and the strong economic recovery from COVID-19-related economic pressures together moderated rate increases, despite reinsurers’ best efforts to maintain pricing momentum.
  • Capacity overall remained more than sufficient to meet demand, but reinsurers resisted the temptation to compete for top-line revenue, so capacity for poorly performing classes was constrained.
  • Concerns over inflation and COVID-19 related loss developments had no impact on pricing with flat or modestly rising rates for property renewals.
  • Momentum continued in the catastrophe bond market, which saw around US$6 billion of new issues in the second quarter of 2021, outstripping all new catastrophe bond capacity issued in 2019.
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