Global Property Catastrophe Reinsurance Rates Set to Drop 5-15%: Implications for Investors and Businesses in Oman
LONDON: Global property catastrophe reinsurance rates are set to decrease by 5% to 15% on January 1 for portfolios that have not incurred any losses, according to a report from reinsurance broker Guy Carpenter. This shift indicates a more competitive market after several years of increasing rates.
Reinsurers, who provide insurance to primary insurers, have previously raised prices and limited coverage options due to higher losses from conflicts and natural disasters. However, following a period of strong profits, reinsurers are now more inclined to accept additional risk, as noted by Guy Carpenter, a subsidiary of Marsh McLennan.
“Renewal outcomes at year-end reflect reinsurers’ positive property experience over the last two years,” remarked Dean Klisura, president and CEO of Guy Carpenter.
In contrast, insurance portfolios that have faced catastrophe losses in the United States, Europe, and Canada will experience stable rates or increases of up to 30%, the report added.
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The recent drop in global property catastrophe reinsurance rates signals a more competitive landscape for businesses in Oman, offering potential cost savings for insurers and, by extension, their clients. Smart investors should capitalize on this trend, exploring opportunities in the reinsurance sector or related businesses as the risk appetite increases. However, they must also remain cautious, as portfolios with past losses could face rate hikes, signaling underlying risks that could impact profitability.
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