Economic turmoil and an increasing demand for coverage is prompting reinsurance sellers to hike rates, with double-digit price increases seen on average for U.S. risks as the Jan. 1 renewal season came to a close, prominent brokers report.
Guy Carpenter said its "World Rate on Line" (ROL) index showed an 8 percent increase globally, characterizing the reinsurance price hikes as "moderate on average" for the latest Jan. 1 renewals. For the United States, price hikes were even steeper–up by 11 percent.
The upward climb was in reaction to "the dual pressures of a financial catastrophe and the second most expensive property-catastrophe year on record," according to the firm. However, those increases were "tempered by large capital positions" at the start of last year, which allowed carriers to absorb losses, the report added.
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