latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/reinsurance-prices-expected-to-rise-by-at-least-5-in-2021-8211-moody-s-60263514 content esgSubNav
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us
In This List

Reinsurance prices expected to rise by at least 5% in 2021 – Moody's

Infrastructure Issues: Tools to Dig Deep on Potential Risks

Part Two IFRS 9 Blog Series: The Need to Upgrade Analytical Tools

2018 US Property Casualty Insurance Market Report

Fintech

Fintech Funding Flows To Insurtech In February


Reinsurance prices expected to rise by at least 5% in 2021 – Moody's

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.

While some buyers expect to buy more reinsurance in 2021, the increase will be less compared to the last two years as higher prices reduce demand, according to Moody's. The survey detected that demand for casualty reinsurance will remain steady after increasing over the past two years.