Global reinsurance rates are expected to continue rising next year, in a range of below-average single-digit percentages, Moody’s analysts said Tuesday.
Reinsurance rates have increased in recent years following natural disasters such as hurricanes and forest fires, as well as the impact of the COVID-19 pandemic.
“We expect this (price) trend to continue,” Helena Kingsley-Tomkins, Moody’s insurance credit analyst, said at a press conference.
Insurers and reinsurers face the risk of future natural disasters as climate change makes them more difficult to predict. Moody’s said demand for insurance and reinsurance is also increasing as the global economy recovers.
The rating agency also raised its outlook on global reinsurers from negative to stable on Tuesday, citing rising premium rates amid a global economic rebound.
Reinsurers share the burden of large losses such as hurricanes with insurers in exchange for a portion of the premium.
Insurance losses from the pandemic have so far amounted to around $ 37 billion, Kingsley-Tomkins said, well below initial industry projections of as much as $ 100 billion.
Fitch also said on Tuesday that the outlook for the sector is improving due to higher prices, an economic rebound and lower losses from the pandemic.
Rating agencies typically update their outlook ahead of an annual Monte Carlo reinsurance event each September. The event takes place virtually this year.
Global property and casualty insurance premiums are expected to more than double to $ 4.3 trillion in 2040, from $ 1.8 trillion in 2020, as the industry shifts from low-risk auto insurance to general and casualty insurance. higher risk liability, according to the Swiss Re Institute. week.
(Reporting by Carolyn Cohn; editing by Marc Jones and Susan Fenton)
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