Double-digit price will increase anticipated for Cat reinsurance: Fitch – Enterprise Insurance
Catastrophe reinsurance rates are likely to rise more than 10% during the year-end renewal, rating agency Fitch Ratings Inc. announced on Monday.
Insured losses of approximately $ 100 billion in 2021 and the prospect of natural catastrophe losses increasing in frequency and severity are the main reasons behind the expected increases for the Jan. 1 extensions, Fitch said. Cyber liability and director and officer's liability reinsurers are also affected by losses, the company said in an industry commentary.
"We anticipate 2022 will be the fifth year in a row with price increases, although we anticipate growth will be slower than 2021 as the non-lossy businesses should have broadly stable price developments," said Fitch.
The rate hikes will make the reinsurance sector more resilient to the effects of climate change, Fitch said.
In addition, the risk of rising inflation for the reinsurance industry is manageable, said the rating agency.
"The recent price increases in the property lines are sufficient to offset the upward pressure on claims inflation with rising repair costs for apartments or vehicles, while the long-haul liability lines will suffer only after the long-term effect of the multi-year inflation above expectations," said Fitch.