Latest commentary from Guy Carpenter
January 1 Reinsurance Renewals Commentary
This Index has risen by 4.5%* at January 1st 2021, reflecting the price increases achieved by reinsurers at renewals.
This is a similar move to the one seen a year ago, when the Index rose by roughly 5%, higher than the 1% rise seen at Jan 2019, but lower than the January 2018 renewals, when the Index rose by 5.3%.
Price increases at the January 1, 2021 reinsurance renewals were moderated compared to initial expectations by abundant capital levels and an increased willingness on the part of reinsurers to deploy capacity in several sectors, according to Guy Carpenter.
Guy Carpenter explained that the property catastrophe reinsurance market saw some “significant” price adjustments for loss-impacted programs in peak zones, whereas loss-free accounts in other geographies actually trended flat to down.
Pricing generally settled at the lower end of expected increases outside of more constrained segments at January 1. Where placements were loss impacted, particularly in cases where retentions were perceived to be too low, reinsurers held firmer on pricing or structure adjustments.
On non-loss impacted programs, risk-adjusted pricing was up mid-single digits to low teens in the United States; while in EMEA and the Asia-Pacific region, risk-adjusted pricing increased by low single digits on average.
* Preliminary numbers.
- View the Guy Carpenter U.S. Property Catastrophe Rate-On-Line Index.
- View the Guy Carpenter Regional Property Catastrophe Rate-On-Line Index.
The Guy Carpenter ROL index is a measure of the change in dollars paid for coverage year on year on a consistent program base. The index reflects the pricing impact of a growing (or shrinking) exposure base, evolving methods of measuring risk and changes in buying habits, as well as changes in market conditions. Unlike risk-adjusted measurements, the index is not dependent on the model or method used to measure the amount of perceived risk in a program, which can vary widely.