As higher returns draw in more capital to reinsurance, it will likely take some pressure off the pricing of coverage. Already, a surge in returns for catastrophe bonds—or securities that pay premium interest rates, but can lose their principal in the event of a stated event or loss—helped spur issuance last year, which hit a record $15 billion. Overall, pricing for global property catastrophe reinsurance, as measured by Guy Carpenter’s Global Rate on Line Index, was up about 5% for the Jan. 1 renewals. That was down from a jump closer to 30% this time last year. Some of the capital coming back into the market is in the form of reinsurance for reinsurers. This is known as retrocession, or “retro.” The risk-adjusted prices for retro declined by as much as 15% for the January 1 renewals.
- Date Posted:
- January 9, 2024
The world experienced its hottest year in 2023, with “climate records tumbling like dominoes” as the global average temperature reached almost 1.5C above pre-industrial levels, the European earth observation agency has said. Scientists from the Copernicus climate change service said that last year marked the first since records began in which every day was at least 1C warmer than pre-industrial levels before human-induced climate change began to take effect. Nick Dunstone, a climate scientist at the UK Met Office, said 2024 would be “another record-breaking year”, as a result of the continued strength of the naturally occurring El Niño effect, which heats the Pacific Ocean surface and exacerbates global warming caused by greenhouse gases.