Reinsurance coverage rates have increased for Canadian insurers at the January 1, 2021 renewal period.
The rating agency AM Best published these findings in a report entitled ILS Market Endures Elevated Catastrophe Activity and Global Pandemic in 2020.
For Canada, increases ranged from 0 per cent to 5 per cent for non-loss affected reinsurance contracts. Loss-affected treaties saw hikes of 10 per cent to 20 per cent.
A global trend
This upward trend has been observed around the world, the AM Best analysts point out. “The global reinsurance market benefited not only from the uptick in rates but also from the ongoing tightening in terms and conditions. Some reinsurers have made changes in their property treaty reinsurance contracts, including communicable disease exclusions, cyber loss exclusions, and the use of named peril triggers,” the report states.
How have insurers reacted to these changes? “Overall, buyers were satisfied with the rate increases and changes in terms and conditions. Alongside the firming of rates, tightening terms and conditions most likely will continue in the near future,” the AM Best analysts say.