In general, buyers’ largely stable capacity requirements did not outstrip re-insurers’ collective appetite in most lines of business.
The 1 April 2022 renewal period was largely driven by the Japanese renewals which have seen substantial rate increases recently after recent major catastrophe losses, steady improvement in original property rates and no reduction in original earthquake rates. This resulted in an orderly and less tense renewal in Japan, but elsewhere pockets of difficulty were observed in certain classes (e.g., Marine and Marine Retro, Aerospace).
Inflation remains a significant and growing concern for re-insurers. It really is now a key topic on every line of business with re-insurers assessing the impact of inflation on underlying portfolios to then be reflected in reinsurance pricing models.
Buyers able to demonstrate that their own underwriting is taking into account inflationary impacts faced an easier renewal. Meanwhile, as conflict in Ukraine continued in the background of renewal discussions, the market standard Sanction Limitation & Exclusion Clause, LMA 3100, saw almost universal adoption. This move is part of a continuing wider post-COVID trend among re-insurers to push for greater clarity of coverage.