insurance

As anticipated, insurance industry losses from the ongoing bushfire devastation across Australia are soaring as more clarity on the number of claims comes in, with the total now reaching US $485 million (A$700 million).

Insurance-linked securities (ILS) investors are looking for greater certainty on cyber risk before diving into underwriting cyber reinsurance contracts in ILS form. While this market is still developing, CyberCube is working directly with the industry to try to drive greater understanding and comfort of the risks involved.

Insurance market claims from Australia’s devastating bushfire season have begun to soar as anticipated, with the latest claims figure now pegged at US $300 million (A$431m) by the Insurance Council.

Alternative sources of reinsurance and retrocessional capital has contracted by 7%, as investors are being more cautious with making new investments, according to broker Guy Carpenter’s estimates.

Rates-on-line for non-marine retrocessional reinsurance contracts were up by as much as 40% in the January 2020 renewals, as the segment experienced significant volatility, according to Hyperion X data.

Global property catastrophe reinsurance rates have risen at the renewals, according to broker Guy Carpenter, who said that its Global Property Catastrophe Rate-On-Line Index has risen by 5% at 1/1 2020.

Australian primary insurance giant IAG has renewed its catastrophe reinsurance arrangements for 2020, adding 10% to take the size of the program coverage to $10 billion, but has also reported that the ongoing bushfires in Australia have triggered its aggregate reinsurance protection.

The January 2020 reinsurance renewals saw significant variation in market conditions and rates, as capital remained plentiful to help ceding companies secure their coverage requirements, but volatility in areas led to differing outcomes, according to Hyperion X.

Update: Claims hit US $300m a few days after this article, read the latest here. Insurance claims from current season bushfires in Australia have now reached US $207 million (according to an Aon source), surpassing US $200 million according to the Insurance Council who now predict that losses will soar.

The January 1st 2020 reinsurance renewal saw markets diverge, leading to wide variances in pricing and capacity across geographies and lines, while judicious reinsurers applied greater importance on relationships.