Reinsurance net premiums written increase 7.4% in H1: Fitch

First-half nonlife reinsurance net premiums written rose 7.4% to $77.60 billion among a group of 18 nonlife reinsurers, said a report Tuesday from Fitch Ratings Inc.

The group had a first-half aggregate reinsurance combined ratio of 88%, including “moderate losses” from catastrophes, Fitch said, compared with 89.4% in the first half of 2022.

Although the June-July 2023 reinsurance renewals were more “orderly” than the “frantic” January 2023 renewal, they resulted in similar price increases, Fitch said.

U.S. property markets saw the steepest price hikes at 30% to 75% increases for risk or catastrophe loss-hit business while loss free rates rose a more modest 10% to 40%. Florida property saw 30% to 40% rate increases for catastrophe loss hit business, reflecting the impact of Hurricane Ian in 2022.

Casualty reinsurance rate changes at the mid-year 2023 renewals showed more stability relative to property with pricing that continues to exceed loss costs. Reinsurers, however, remain concerned about pricing adequacy due to both economic and social inflation, Fitch said.

Results should remain favorable into the second half and 2024 as rate increases stay ahead of loss cost trends, Fitch said.

“Premium growth is likely to continue, but at a reduced pace as price increases decline and a potential recession dampens exposure growth,” even as “higher inflation has boosted premiums through higher insured values.”