Rising Frequency of Severe Weather Pushes Reinsurance Rates Higher
The rising occurrence of natural disasters such as wildfires, storms, and hurricanes has prompted an increase of as much as 50% on the key January 1 renewal date of U.S. property catastrophe reinsurance rates as reinsurers look to recoup losses due to rising claims. Since reinsurers provide insurance for insurers, the agreed upon prices set the trend for the cost of insurance for the next 12 months. Clients with policies previously hit by natural disasters last year were impacted by the rate increase, but rates remained unchanged for some clients not exposed during the year. Taking a broader look beyond the U.S. borders, the property catastrophe reinsurance rates doubled in Turkey, while “political violence insurers are reconsidering the breadth of their cover in potential conflict hot spots” due to the conflicts in Gaza and Ukraine.