Reinsurers have taken a measured approach to April renewals, according to a new report by Willis Re. April renewals saw significant rate increases on loss-affected accounts and more modest increases on loss-free business. The global reinsurance sector moved smoothly to a work-from-home model as a result of the COVID-19 outbreak and was able to provide uninterrupted services, according to Willis Re’s 1st View renewals report.
The largest risk-adjusted property price increases were posted on loss-hit catastrophe treaty contracts, which rose 30% to 50% for Japanese wind exposures, according to Willis Re. Loss-free treaties posted smaller rises and, in a few cases, renewed as expiring. Capacity provided through insurance-linked securities (ILS) fell slightly, with some examples of funds reducing their April 01 offer due to recent investor redemptions.
Reinsurers’ response to COVID-19 was affected by timing and underlying coverage considerations, Willis Re said. Early firm orders were completed without specific exclusionary language. Several reinsurers also sought exclusions.
“Having demonstrated its ability to manage the operational challenges of COVID-19 so far, the global reinsurance industry is well-placed to demonstrate its ability to manage the longer-term financial challenge and continue with its mission of providing support to primary insurance companies and their policyholders,” said James Kent, global CEO of Willis Re.