A measured approach to April 1 renewals
Willis Re 1st View renewals report
London, UK (Apr. 1, 2020) – Reinsurers took a measured approach to the April renewals, which saw significant rate increases on loss-affected accounts and more modest rises on loss-free business. The global reinsurance sector smoothly moved to the new working-from-home model following the COVID-19 outbreak and was able to provide uninterrupted service, according to the latest 1st View renewals report from Willis Re, the reinsurance division of Willis Towers Watson, a leading global advisory, broking and solutions company.
The largest risk-adjusted property price increases were seen on loss-hit catastrophe treaty contracts, which were up +30% to +50% for Japanese wind exposures. Loss-free treaties saw less dramatic rises and, in a handful of cases, renewed as expiring. Capacity provided through insurance-linked securities (ILS) decreased slightly, with occasional examples of funds reducing their 1 April offer due to recent investor redemptions.
Reinsurers’ COVID-19 response was impacted by timing and underlying coverage considerations. Early firm orders were completed without specific exclusionary language. In other cases, several reinsurers sought exclusions. In some cases, these were achieved; in others, buyers provided comfort through letters of understanding, which explained that underlying original policies have no exposure to COVID-19-related losses.
James Kent, global CEO of Willis Re, said, “Having demonstrated its ability to manage the operational challenges of COVID-19 so far, the global reinsurance industry is well placed to demonstrate its ability to manage the longer-term financial challenge and continue with its mission of providing support to primary insurance companies and their policyholders.”
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Download the full report: Willis Re 1st View: Market unity and discipline: Managing initial COVID-19 challenges.
About the Report
The Willis Re 1st View report is a thrice-yearly publication that includes specific commentary on key trends throughout the world’s major reinsurance classes and regions.
About Willis Re
One of the world’s leading reinsurance brokers, Willis Re is known for its world-class analytics capabilities, which it combines with its reinsurance expertise in a seamless, integrated offering that can help clients increase the value of their businesses. Willis Re serves the risk management and risk transfer needs of a diverse, global client base that includes all of the world’s top insurance and reinsurance carriers as well as national catastrophe schemes in many countries around the world. The broker’s global team of experts offers services and advice that can help clients make better reinsurance decisions and negotiate optimum terms. For more information, visit our Reinsurance Solution page.
About Willis Towers Watson Securities
Willis Towers Watson Securities, with offices in New York, London, Hong Kong and Sydney, provides advice to companies involved in the insurance and reinsurance industry on capital markets products, including acting as underwriter or agent for primary issuances, operating a secondary insurance-linked securities trading desk, and engaging in general capital markets and strategic advisory work. Willis Towers Watson Securities is a trade name used by Willis Securities, Inc., a licensed broker dealer authorized and regulated by FINRA and a member of SIPC (“WSI”), Willis Towers Watson Securities Europe Limited (Registered number 2908053 and ARBN number 604 264 557), an investment business authorized and regulated by the UK Financial Conduct Authority (“WTW Securities Europe”) and Willis Towers Watson Securities (Hong Kong) Limited, a corporation licensed and regulated by the Hong Kong Securities and Futures Commission (“WTW Securities (HK)”).
About Willis Towers Watson
Willis Towers Watson (NASDAQ:WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving more than 140 countries and markets. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.
SOURCE: Willis Towers Watson
Tags: coronavirus, epidemic, reinsurance, Willis Re, Willis Towers Watson
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