Reinsurance Market Prospective 2019

06 February 2019

Outlook for the reinsurance market after January 2019 renewals

It is crucially important for reinsurance buyers to have detailed insights into key market drivers.

JLT Re recently published their Reinsurance Market Prospective: Uncharted Territory which contains the findings from the reinsurance renewals at 1 January 2019, across different markets and sectors. The document also provides a prospective view for the market.

2018 was the fourth most costly catastrophe year ever in real terms and in 2017, insured catastrophe losses worth USD 150 billion were recorded. Together, these two years represent the most costly two-year period ever for insured catastrophe losses.

Although market conditions tightened for business classes that suffered sizeable losses or where performance has deteriorated in recent years, reinsurers' desire and ability to underwrite risks remained healthy overall.

The reinsurance market has clearly matured since the days when large catastrophes created massive price volatility. The reinsurance sector today remains exceptionally well capitalised, even at a time of macroeconomic change and unprecedented catastrophe loss activity.

Loss experiences and the macroeconomic environment will play an important role in shaping the reinsurance market in 2019.

Some findings from the January renewal:

Property: Capacity constraints in the retrocession market dominated the 1 January 2019 renewal. Another year of significant losses and locked capital in the retrocession market pushed retrocession rates up by double digits on loss-affected layers. Global and Lloyd’s direct and facultative (D&F) catastrophe covers were, however, less affected by 2018 losses and rate changes in 2019 ranged typically down 2.5% to down 7.5% on a risk-adjusted basis.

Casualty: There was a challenging environment in the casualty reinsurance market. A combination of increased severity, social inflation and instances of adverse reserve development has squeezed reinsurance margins in a number of casualty lines.

Specialty: In this market, strong levels of capacity offset any upward pricing pressures that came from successive years of rate decreases and rising loss trends.

To read the full report or download it, please visit