Reinsurers managing Covid-19 disruption well, according to Willis Re
Reinsurers saw a significant rate increase and modest rises on loss-free business with April renewals during Covid-19
The finding was published in the first view renewals report from Willis Re, the reinsurance division of broker Willis Towers Watson.
For the April renewals, the largest risk-adjusted property price increases were seen on loss-hit catastrophe treaty contracts, which were up +30 per cent to +50 per cent for Japanese wind exposures. Loss-free treaties meanwhile saw less dramatic rises and, in a handful of cases, renewed as expiring.
The report also showed that the global reinsurance sector moved smoothly to the new working-from-home model following the Covid-19 outbreak, providing an uninterrupted service.
James Kent, CEO of Willis Re, said: “Having demonstrated its ability to manage the operational challenges of Covid-19 so far, the global reinsurance industry is well placed to demonstrate its ability to manage the longer-term financial challenge and continue with its mission of providing support to primary insurance companies and their policyholders.”
At the same time, reinsurers’ Covid-19 response was impacted by timing and underlying coverage considerations. Several reinsurers sought exclusions and in some circumstances, these were achieved. In others, buyers provided comfort through letters of understanding which explained that underlying original polices have no exposure to Covid-19-related losses.