LONDON (S&P Global Ratings) Aug. 24, 2023--Global reinsurers are ready to take on more natural catastrophe risk, although contrasting approaches toward catastrophe risk remain, S&P Global Ratings said in a report published today (see "Catastrophe Risk Appetite Varies Among Global Reinsurers," on RatingsDirect).
The global property catastrophe reinsurance business continues to observe pricing correction following six years of elevated losses.
Amid continued variations in catastrophe risk appetite, more than half of the top 20 global reinsurers maintained or reduced their natural catastrophe exposures during the January 2023 renewals, despite the improved pricing terms and conditions and rising demand.
"We expect the top 20 global reinsurers to deploy more capital toward catastrophe risk in 2023 and 2024, because of continued strong demand from cedents, while higher retrocession cost could lead reinsurers to ceding less of their risk," S&P Global Ratings credit analyst Charles-Marie Delpuech said.
Meanwhile, improved underwriting margins and rising investment returns, coupled with still-robust capitalization (though lower than last year), are providing further buffer against exceptional shock.
"For 2023, we expect the property catastrophe business to contribute about 2.5 percentage points to return on equity for the top 20 global reinsurers if losses remain within the annual budgets," added Mr. Delpeuch. "In our view, this would translate into an annual insured natural catastrophe loss of about $85 billion for the entire insurance industry."
This report does not constitute a rating action.
The report is available to subscribers of RatingsDirect at www.capitaliq.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to research_request@spglobal.com. Ratings information can also be found on S&P Global Ratings' public website by using the Ratings search box located in the left column at www.standardandpoors.com. Alternatively, call one of the following S&P Global Ratings numbers: Client Support Europe (44) 20-7176-7176; London Press Office (44) 20-7176-3605; Paris (33) 1-4420-6708; Frankfurt (49) 69-33-999-225; or Stockholm (46) 8-440-5914
Primary Credit Analyst: | Charles-Marie Delpuech, London + 44 20 7176 7967; charles-marie.delpuech@spglobal.com |
Secondary Contacts: | Johannes Bender, Frankfurt + 49 693 399 9196; johannes.bender@spglobal.com |
Taoufik Gharib, New York + 1 (212) 438 7253; taoufik.gharib@spglobal.com | |
Research Contributors: | Vikas Rathore, CRISIL Global Analytical Center, an S&P affiliate, Mumbai |
Pratik C Giri, CRISIL Global Analytical Center, an S&P affiliate, Mumbai | |
Additional Contact: | Insurance Ratings EMEA; Insurance_Mailbox_EMEA@spglobal.com |
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