US property cat reinsurance rates at highest level since 2009: Guy Carpenter

Property catastrophe reinsurance rates-on-line in the United States are now back at their highest level since 2009, according to updated data from broker Guy Carpenter.

Guy Carpenter’s data shows that its U.S. Property Catastrophe Rate-On-Line Index, a broad measure of catastrophe reinsurance pricing in the key United States marketplace, has now risen by almost 15% at the renewals so far in 2022.

The U.S. Property Rate on Line Index from the reinsurance broker is a proprietary index of US property catastrophe reinsurance Rate-on-Line movements.

The data comes from brokered excess-of-loss reinsurance placements and Guy Carpenter has been maintaining the index since 1990, making it the longest-standing source of insight into US cat reinsurance pricing.

It is updated after the January 1st renewals and July 1 renewals, so reflects US property cat reinsurance pricing for the full year, and is calculated by looking at the change in rate-on-line (RoL) year on year across the same renewal base.

For 2022, the Index rose by 14.8%, a level that sees it back at its highest since 2009.

The near 15% jump in the Index after the July 2022 reinsurance renewals is the the largest jump in this Index of reinsurance pricing and rates-on-line since 2006. 

Guy Carpenter’s U.S. Property Rate on Line Index has been rising steadily since 2017.

With cumulative year’s of reinsurance rate increases seen across the United States since then, the Index now stands some 51% higher than it did at that stage.

The mid-year reinsurance renewals saw some of the steepest price increases in year’s across many regions, particularly for catastrophe loss exposed programs.

Differentiation was again key, with reinsurers and ILS funds becoming increasingly selective of cedents, programs and layers they deploy capital to.

You can analyse the data here.