From: Reinsurance News
According to key market conditions identified by global reinsurer Swiss Re, price rises are expected to continue both this year and next, further increasing the profitability of new business.
For example, Swiss Re notes how re/insurance rates have been hardening since 2018, with price momentum having picked up at this year’s January renewals.
While the market is one currently defined by tighter capacity, analysts say this is driven by a reduced risk appetite on the re/insurer’s end, rather than a shortage of capital per se.
This reduced appetite is said to be driven by an environment that has been rife with uncertainty, ambiguity and volatile capital markets.
Indeed, last year’s capital losses proved temporary as asset valuations recovered quickly from the lows of March 2020.
According to data from Aon, global reinsurance incumbents and a few new players raised close to $15 billion of capital in 2020 to take advantage of the hard market opportunities created by attractive rates.