Catastrophe losses for 2017 are estimated around $136bn for the global reinsurance market, and is shaping up to be one of the worst loss years on record says the latest report from insurance broker, Willis Re.
Despite the scale of weather-related catastrophic events across the globe in 2017 rate increases did not rise to a level that reinsurers were expecting.
Disappointingly, pricing across global property catastrophe and risk programmes saw an average adjusted increases of just up to 7.5%.
James Kent, global CEO of Willis Re, said in a release: "Clearly the 2018 renewal season will for many reinsurers be a disappointment in terms of the rating levels achieved. However, this must be balanced against the ability of the market to provide buyers with stability of capacity at reasonable prices with an orderly renewal process, which demonstrates the growing advancement of the market.”
The catastrophe losses of 2017 according to Willis Re report are coinciding at a time when profitability in non-catastrophe lines is constrained and prior-year reserve releases are slowing.
Pricing corrections have been muted due to the combination of strong reinsurance market capitalisation, losses being split over a number of different events and the fact that a large tranche of the losses were retained in the primary market.