Costlier CAT treaty market


The CAT Treaty market continues to shrink and pricier as the following article shows.


Hannover Re says trend towards more frequent & costlier Nat CATs to continue


In response to elevated losses arising from natural catastrophes, prices for catastrophe covers have risen steadily in recent years, says global giant reinsurer Hannover Re in a statement.

With growing prosperity, greater urbanization and progressive climate change, losses from natural catastrophes will likely continue to increase at a disproportionately high rate.


Going into 2023, Hannover Re anticipates developments in several key markets for natural catastrophe risks – based on the assumption that there won’t be any further market-changing events this year.


Commenting on regional developments, the reinsurer highlights Japan and Australia/New Zealand among other markets.


Japan


After relatively little change in the 2022 renewals, cedants are expected to restructure certain programmes in 2023 so as to stabilize their total spending on reinsurance after a number of years of gradual rate increases. While inflationary pressure will likely be less on some programmes, many providers have revised their risk assessment after the latest series of typhoons. While Hannover Re expects the upward pressure on rates to be sustained, it will continue with its long-term focused and partnership-based approach.


Australia/New Zealand


Devastating flooding on a historic scale has hit the Australian market this year. The spring floods in southeast Queensland and coastal areas of New South Wales were the most expensive in the country's history. These events were preceded by a series of significant major losses in prior years.


Further material price increases are therefore needed, not least because insurers and reinsurers are well aware of the fact that the region of Australia and New Zealand is particularly susceptible to natural disasters that are accentuated by climate change, such as hail, floods, droughts and bushfires.


Related articles:

https://www.pirainc.com/post/philippine-catastrophe-insurance-facility-alternative-to-a-shrinking-cat-treaty-market



Source: asiainsurancereview.com