General Insurance Article - Insurers face headwinds on mid year renewals


Aon has launched the June/July edition of its Reinsurance Market Outlook report, which provides comprehensive analyses of the key market dynamics of the renewals period, including the impact of COVID-19.

 Despite a rough start to the quarter, capacity was generally available for June and July renewals, albeit with a range of outcomes for insurers driven by timing, structure, and peak zone capacity constraints. Demand remained relatively stable as many governmental-related covers were pulled from the market offset by some insurers electing to secure additional capital to reduce volatility heading into a predicted, above-average hurricane season. Despite different market dynamics than in many past renewals, insurers were able to secure needed limit in the face of already reported COVID-19 related claims, future uncertainty regarding macroeconomic trends and premium volume impact from COVID-19 for the longer term.

 Q1 total global reinsurance capital stood at USD590 billion, a decrease over 2019 of USD35 billion, or 6 percent. This result was comprised of a 6 percent drop in traditional reinsurance and a 4 percent drop in alternative capital ending the quarter at USD499 billion and USD91 billion, respectively. While traditional reinsurers saw impacts of COVID-19 that affected capital results at the end of Q1, alternative capital remains impact by approximately USD15 billion in trapped capital.

 Prior to the onset of COVID-19 in the US, primary rates were trending towards the highest increases in many lines of business seen in years. By the end of Q1, auto, property, and umbrella lines of business were looking at rate increase above 10 percent for the quarter.

 Premium levels for the remainder of the year remain uncertain as multiple factors impact outcomes from prolonged lower usage of cars to reduced patronage in retail stores and unfilled airline seats. These dynamics will in turn fuel different needs from insurers for reinsurance protection throughout the remainder of the year.

 Property catastrophe losses through the first half of 2020 maintained near median levels of activity with approximately USD26 billion in losses accumulated to date. That said, above normal forecasts for the Atlantic Hurricane are predicted by National Oceanic and Atmospheric Administration, Colorado State University, and Tropical Storm Risk, which would be further

  

 Reinsurance Market Outlook 

Back to Index


Similar News to this Story

Aon publish their latest Global Catastrophe Recap report
Aon launches the latest edition of its monthly Global Catastrophe Recap report, which evaluates the impact of the natural disaster events that occurre
Insurers set for huge rise in business interruption claims
Business interruption claims will soar in the UK as a result of the COVID-19 lockdown. GlobalData’s revised post-COVID-19 forecasts general insurance
Most students in the dark about insurance
HALF of students don't understand the term 'contents insurance', a new survey has found. A poll of 1680 students conducted by UNIDAYS a

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.