SCOR cites 40% average US catastrophe XL renewal rate increases at April

scor-office-london

Global reinsurance company SCOR has given an additional signal on the trajectory of US catastrophe reinsurance rates, citing 40% average rate-on-line increases achieved at the April renewals.

This aligns with other observations, including broker Gallagher Re who said US catastrophe rates increased by 30% to as much as 100% at the April reinsurance renewal season.

SCOR further trimmed parts of its catastrophe reinsurance book at the renewals, saying that it decreased the limits deployed to property proportional reinsurance treaties exposed to natural catastrophes by around 13%.

But at the same time SCOR said it grew its non-proportional excess-of-loss reinsurance in P&C lines, but concentrated on contracts where the retention has increased significantly.

As a result, the reinsurance firm said its natural catastrophe PML was stable after the renewals.

Overall and taking advantage of the P&C reinsurance cycle, SCOR said it grew premiums written by 17% at the April renewal, but improved the expected technical profitability and risk/return profile of its Property & Casualty renewal portfolio at the same time, with an average rate increase of 7%.

Citing a “favorable market environment for reinsurers, both in terms of pricing and terms and conditions,” SCOR said it is “actively pursuing the deployment of its capital by building on its relationships with its long-term clients.”

Overall, non-proportional reinsurance rate increases averaged at 23% in April, only slight below the January renewals 24%, SCOR said.

Notably, average rate increases on catastrophe excess-of-loss programs were 20% in Japan and 40% in the United States and India.

Jean-Paul Conoscente, CEO of SCOR P&C, said, “At the April 1, 2023 renewals, SCOR continues to improve the expected technical profitability and optimize the risk/return profile of its P&C risk portfolio.

See also  What is the cheapest car insurance called?

“We are very satisfied: our objectives in terms of technical profitability have been achieved and the volumes written are up.

“The outlook remains positive for the June and July 2023 renewals.”

As the rate trajectory for US catastrophe exposed business continued to hold at April 1st, all eyes now turn to the mid-year and even if we do see new capital entering the space, it seems certain reinsurance buyers are facing futher double-digit year-on-year rate increases across the catastrophe towers renewed.

Read all of our reinsurance renewals coverage here.

Print Friendly, PDF & Email