Costly disasters in 2011 are causing reinsurance groups to demand higher rates to protect underwriters in January renewals, a global insurance broker said yesterday.
Reinsurance rates are likely to rise across Asia, the US and Europe as well as substantially in catastrophe-hit areas, as cumulative losses and tough new Solvency II regulation in Europe affect the market, according to the head of Cooper Gay’s reinsurance division, the world’s sixth-biggest reinsurance broker.
Andrew Cooper told Collins Stewart analysts that 2012 looked like “one of the strangest renewal seasons of my career” with rates improving but with large differences between markets.
“These comments give us increased confidence that we will see further price increases through 2012,” analyst Ben Cohen said in a note. Cohen added that in Europe, “Cooper Gay was bullish that Solvency II would stimulate demand” despite the region seeing only small rises at present.
The comments contrast views from broker Willis arguing that rate rises may still remain small this year.
Cohen expects Hannover Re and Scor to see low single digit share price growth this year, while Munich Re is less defensively positioned.