Guy Carpenter, the reinsurance subsidiary of Marsh & McLennan, has revealed that reinsurance pricing moderated at the January 1 renewal period has declined across most key lines of business.
The decline was also noted across most areas of the world when compared to the past three renewal seasons.
Loss activity in several business classes only had a localised impact as capacity remained abundant across the industry as dedicated reinsurance capital increased by 5% from January 01, 2016, to January 01, 2017.
“Although current renewals indicate that the decline in reinsurance pricing is slowing, this moderation was not surprising and the more interesting development may be the continued evolution of coverage and solutions to meet changing client needs,” Peter Hearn, CEO of Guy Carpenter said.
“An abundance of available capital and improving analytics tools are essential components to create support for notable advances. An innovative mindset is the key to success in today’s marketplace as the increasing complexity of risk brings new levels of uncertainty.”
The ILS space saw dramatic movement in pricing in the final quarter of 2016 with decreases as high as 30%.
For the year ahead, the reinsurance firm noted that the surplus capital in the industry will have to find a suitable home to match the complex insurance landscape.
The firm highlighted political volatility and terrorism coverage as areas of expansion for the reinsurance industry worldwide as the industry tries to match the appetite of global insurers.
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