The Allen Thomas Group Sees Continued Hardening in Reinsurance Renewals

June 21, 2023 - /PressAdvantage/ - The Allen Thomas Group, an independent insurance agency based in Ohio, has recently published a blog post that predicts a continued trend of rate hardening in reinsurance renewals. This is indicative of the growing cautiousness of reinsurers regarding underwriting risks resulting from the rising severity and frequency of natural disasters, including the impact of the Covid-19 pandemic on the international economy. Higher risks mean higher premiums for policyholders as insurers try to maintain profitability by passing to clients the additional costs.

A spokesperson for The Allen Thomas Group says, “Various macroeconomic factors and capacity shortages have influenced the market trends and industry outlook of the June 1 reinsurance renewals, leading to continued rate hardening. Financial market volatility, inflation, and geopolitical tensions have weighed on renewals, impacting the pricing and coverage of insurance policies. Furthermore, capacity shortages have driven increased pricing, particularly for loss-affected programs. Memories of Hurricane Ian losses have contributed to this capacity shortage, leading to higher prices for earthquake and wind cover.”

Risk aversion has also increased in the present climate, changing the landscape of risk management. The result is an average increase of 33 percent for risk-adjusted property/catastrophe pricing, with higher coverage layers having more than 40 percent year-on-year increases for wind and earthquake cover. The pricing is indicative of the continued rate hardening in reinsurance due to historic catastrophe losses and capacity shortages.

The reinsurance market currently has several challenges that are affecting risk management. One of these challenges is risk aversion, which has worsened as a result of the increased financial and geopolitical risks. Furthermore, macroeconomic factors, including inflation, geopolitical tensions, and financial market volatility, are dampening renewals. These factors are contributing to the capacity shortages and rising prices, especially for loss-affected programs.

Such challenges in the reinsurance market are also affecting risk management strategies. Cedents have been increasing retentions and changing underwriting guidelines because of the rising prices, especially in lower coverage layers. The continued low levels of dedicated capital in the market, although recovering, are also having an impact on risk management. Various factors are changing the landscape of risk management, and both insurers and reinsurers need to adapt to these changes to continue offering effective coverage and risk management.

The spokesperson for The Allen Thomas Group says, “The current market conditions and pricing trends highlight the importance of effective risk management strategies for insurers and reinsurers. It is crucial for companies to assess the risks associated with their portfolios, including potential loss scenarios, and to implement appropriate risk mitigation measures. In addition, companies must carefully monitor pricing trends and market conditions to ensure that they are adequately priced for risk and that they are able to offer competitive pricing to clients.”

Companies would be able to better understand and minimize risks by leveraging data analytics and other advanced risk management solutions that eventually will lead to better results for clients, shareholders, and the broader market. Thus, business owners will have to find stronger insurance carriers to protect them from risks in the future.

Started in 2003 by Joe Race, The Allen Thomas Group has evolved into a leading provider of risk management and financial solutions to both businesses and individuals. Joe Race, who serves as CEO, graduated from The University of Akron and began his career as an investment advisor in the 1990s but he realized soon enough that his customers also had to protect their investments. When the company started, ATG offered help to individual and business clients by providing solutions for their insurance and safety needs. Currently, The Allen Thomas Group offers a full-service and personalized business insurance solutions sourced from different insurance carriers to deliver the most suitable insurance coverage for customers at a competitive rate.

Those who are interested in developments regarding reinsurance can visit The Allen Thomas Group website at https://the-allen-thomas-group.business.site/posts/1831078533657481201 or contact them on the telephone. They are open from 9:00 am to 5:00 pm, from Monday to Friday.

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For more information about The Allen Thomas Group, contact the company here:

The Allen Thomas Group
Joe Race
(440) 826-3676
4081 Jefferson St, Medina, OH 44256

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