Reinsurance market has materially shifted and requires close attention ahead of the January 1st, 2023, renewals.
Lloyd’s discusses the market’s improved underwriting performance and stressed the need to maintain a sustainable attritional loss ratio, while also highlighting increased homogeneity around inflation assumptions.
Lloyd’s sees it from both the cedents and reinsurance perspective, noting that per 2021 accounts, the marketplace reported that its outwards reinsurance is 27.5% of GWP.
We’re closely watching the availability, structuring, pricing and terms of upcoming reinsurance placements, particularly in property and certain specialty classesLloyd’s
Managing agents at Lloyd’s consider the feasibility of their planned reinsurance strategy, with a reassessment of appetites, underwriting strategy, and capital if placements differ to plan.
All syndicates have been asked to provide their assumptions around their outwards reinsurance rates, limits, retentions and availability of cover to help evaluate underwriting plans.
It is already a requirement that Lloyd’s is advised of any material changes in the syndicates reinsurance program compared to plan.
Although reinsurance sector conditions are expected to be challenging for some at 1/1, market dynamics may represent an opportunity for writers of inwards reinsurance at Lloyd’s.
Inwards reinsurance is 36.5% of Lloyd’s total portfolio. But true inwards treaty in the market is about 15%. So, Lloyd’s actively look to support those well positioned to take advantage of any opportunities.