The after-effects of the 2017 hurricanes Harvey, Irma, and Maria, as well as excess capital, are hindering positive ratings movement in the marine reinsurance sector, says Willis Re.
This was revealed in Willis Re’s 1st View report, which also said that abundant capacity across marine classes and attritional losses had curbed pressure for upwards movement in ratings. International cedants are working to expand their coverage and territorial scope, as a means to extract more value from their reinsurance partners.
Furthermore, carriers that offer cargo lines are under extreme pressure to seek increased ratings, with the impact of hurricane losses still being felt and the negative cargo results over the past few years. Reductions on cargo accounts have largely become a thing of the past, the report said.
However, Gulf of Mexico windstorm coverage continues to attract rating increases as reinsurers seek to redress the balance between sustainable pricing and supporting clients in challenging market conditions.
Other marine lines which have had flat to slightly improved ratings are the specie market, energy facultative reinsurers, and the P&I reinsurance market. Energy facultative insurers, in particular, have market capacity at an all-time high, allowing buyers to weigh the benefits of maintaining existing relationships against potential pricing reductions offered by alternative partners.
The P&I reinsurance market saw reinsurers hold firm on maintaining rating levels and firmly resisting requests for reductions. Reassureds are opting to focus on coverage expansion when forming renewal strategies, the report said.