In this article published by Insurance Business Canada, Guy Carpenter’s Carolyn Morley, Managing Director, Global Casualty, mentioned how casualty lines of reinsurance were not facing the same sorts of capacity issues faced in the property sector because of “corrective actions” taken within the casualty market.
By “corrective actions,” Carolyn referred to cumulative rate increases that casualty carriers achieved–most notably in commercial auto, general liability, umbrella, and financial lines–as well as underwriters’ strategic alterations to risk appetite, coverage terms and conditions, limit and retention management, and risk management requirements.
These actions “laid the foundation for more robust reinsurer engagement,” she said, and have played a part in producing more favorable loss development.
“The impact of underwriting actions, together with the effects of the decrease in claims frequency, has today yielded a relatively positive result,” Carolyn said, reflecting on the mid-year 2022 state of the market. “Portfolio performance and growth plans have also made many lines attractive to reinsurers whose risk appetite has been shifting away from certain catastrophe segments or geographies.”
Carolyn went on to mention that she anticipates adequate capacity in casualty, and that she expects the year-end reinsurance renewal cycle to be orderly. Following similar trends from year-end 2021, she does foresee some pricing pressures, depending on line of business and capital requirements.