The primary insurance market now understands that price increases in property and casualty (P&C) reinsurance are needed going forwards, with the market now “reaching a new level of equilibrium”, according to Swiss Re’s Chief Financial Officer (CFO), John Dacey.

In a recent interview with CNBC International News following the release of a strong set of H1’24 results, CFO Dacey discussed the reinsurer’s experience at the July renewals and the P&C reinsurance market more broadly.

“We were very pleased with the July renewals, an 8% price increase and year to date 9%, so there’s been a little bit of modulation,” said Dacey.

Swiss Re’s P&C Re renewed contracts totalled $4.5 billion in treaty premium volume at the July renewals, representing a 7% volume increase compared to the business up for renewal.

Additionally, due to a careful approach to inflation and updated loss models, loss assumptions have risen by 10%.

“As we go forward, we expect that people will continue to see the need for the increase in the loading for cost inflation has lessened, but it’s not gone away,” said Dacey.

He explained that Swiss Re’s updated models, particularly for natural catastrophes, show increasing damage from convective storms and flooding. This necessitates higher prices for areas that were priced lower in 2020, 2021, and 2022.

“And, as we do that, these price increases, frankly, are needed as we continue to go forward. The primary industry, I think, now understands this, we’re reaching a new level of equilibrium where they’re able to get improved rates on their side to be able to pay for the reinsurance that’s required to cover the risks that we assume,” Dacey concluded.

The post P&C reinsurance market is reaching a new level of equilibrium, says Swiss Re CFO appeared first on ReinsuranceNe.ws.