Holborn monitors the price changes achieved for clients a year-end and mid-year. For mid-year 2017, on average pricing reduced by 8% across all lines of business – a continuing trend from 12 months ago.
- Casualty XOL: -6% to -3%
- Property Per Risk: -10% to -7%
- Property Catastrophe: -12% to -8%
- Property Aggregate: -7% to -4%
While Casualty treaty showed signs of flattening, Property covers benefited from the greatest price reductions and, in particular Property Catastrophe. Favorable experience and firm orders below technical pricing metrics helped lower costs. Despite the pressure on pricing, capacity remained strong across all market segments. Domestic markets have a strong appetite for growing their market share, while London held the line by offering reduced capacity, or occasionally retiring from programs. Interestingly, Property Aggregate received increased support across all market segments at mid-year.
Other trends were increasing retentions and limits. Despite favorable market conditions and due to surplus gains, many clients chose to deploy savings to the purchase of additional limit or expanded coverage, while protecting exposure growth. All while reinsurers faced increased CR at year-end 2016 of 94.4%, up 4 points from 2015, and decreasing Operating Returns of 8.0% in 2016, from 9.5% in 2015.