Moody’s: Reinsurance prices expected to rise in 2021
Monday, 09 14 2020, Category: Insurance and Reinsurance, Country: World
Most property and casualty reinsurance buyers who responded to a Moody's survey expect reinsurance prices to increase by at least 5% in 2021, as COVID-19, volatile natural catastrophe losses and capacity constraints impact reinsurers' profitability.
As compared to less than 50% in 2019, more than 90% of the respondents of this year's survey anticipate price increases across all lines next year, while none expect a decrease.
Brandan Holmes, vice president and senior credit officer at Moody's, said some respondents anticipate that price increases could be even higher in 2021 if market conditions worsened in the second half of 2020, or if the U.S. hurricane and wildfire seasons cause higher-than-expected losses.
Buyers expect price increases this year to be strongest for catastrophe-exposed property reinsurance, reflecting rising capacity constraints, according to the report. Over 80% of buyers expect prices to climb by more than 5% across most lines, versus 16% last year. Price increases in loss-affected lines of business will be higher, Moody's said.