Positive pricing momentum has driven premium growth in the global reinsurance sector in the first quarter of 2021, according to a new report from Willis Re.
The firm tracked the performance of 17 of the biggest global reinsurers with significant commercial lines or reinsurance operations over the course of Q1 and found that most firms achieved “meaningful premium growth” over the quarter due to momentum from favourable pricing.
“Continued rate momentum for reinsurance and commercial insurance lines of business drove strong premium growth for a number of the companies which we track,” Willis said in its report. “Notable examples included year-on-year quarterly growth in net written premiums of 14% by Hannover Re and Zurich, and growth of almost 10% by AIG and Chubb.”
While acknowledging some slowing in rates for certain lines of business and geographies, Willis noted that management teams were “confident that reinsurance and commercial insurance pricing would remain favourable for the remainder of 2021 and into 2022.”
Willis also added that management teams were also not “unduly concerned” about inflation, taking the view that - inflation trends had not changed significantly, the gap between headline rate increases and loss cost inflation remains significant, and historically conservative reserving approaches provide a buffer.
“While inflation is certainly a threat to the non-life business model, we also note that a material uptick in inflation should also be accompanied by a normalisation in interest rates,” Willis noted.