The re/insurance underwriting cycle: hard market conditions go on

We expect rate hardening in the re/insurance market to continue through this year and next as re/insurers respond to heightened uncertainty from social inflation, catastrophe losses and COVID-19 claims.

The key takeaways from this edition of Economic Insights are:

  • Rate hardening in re/insurance is expected to continue through 2022.
  • Tighter capacity has been mostly the result of reduced risk appetite rather than capital shortage.
  • Reduced risk appetite is caused by elevated modelling uncertainty arising from social inflation, and nat cat and pandemic-related losses.
  • Macro risks are also elevated with an increasing focus on rising inflation and interest rate scenarios, which can trigger adverse reserves development and losses in asset valuations.

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Economic Insights The re/insurance underwriting cycle: hard market conditions go on

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