Pockets of re/insurance growth remain despite largely flat 1/1 rates: S&P

Much of the hype around significant pricing gains for reinsurers at the January renewals has faded as demand overall was flat to marginally up, but hope remains for some higher demand from regional insurers focused on Florida and the Caribbean, as well as U.S. mortgage credit risk and other emerging lines of risk, according to Standard & Poor (S&P).

S&P said flood insurance was another growth opportunity, citing FEMA having just upped reinsurance cover for 2018 flood losses by $1.04 billion from last year.

“Given the magnitude of the losses suffered by National Flood Insurance Program (NFIP) in 2017, additional reinsurance purchases are quite possible, and reinsurance is likely to become a permanent fixture of NFIP’s risk-management philosophy.

“Further, NFIP reauthorization (likely to be extended until February 2018 as Congress deals with other priorities) could look to increase private capital participation. In addition, some primary insurers will look to increase their penetration beyond the NFIP, likely backed by reinsurance capacity.”

However, uptake of flood risk by re/insurers is expected to be gradual and disciplined within well-defined risk-appetites.

Further…