Willis Re 1st View April 2020: Market unity and discipline: managing initial COVID-19 challenges
Posted 03.04.2020 – Insights
- Reinsurers took a measured approach to the April renewals, which saw significant rate increases on loss affected accounts, more modest rises on loss-free business.
- 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 April 1 offer due to recent investor redemptions.
- In terms of coverage, many April 1, 2020 programs were fully placed well in advance of the due date and have been completed without any COVID-19 specific exclusionary language. For those programs that were not completed well in advance, several reinsurers sought to impose COVID-19 exclusions which in some cases was achieved but in other cases buyers have been able to provide comfort that their original policies have no exposure to COVID-19 related losses with letters of understanding issued to reinsurers.