Analysts at Berenberg believe that hardening market conditions will continue through into 2022, as reinsurers seek to earn returns above their cost of capital in the face of ultra-low interest rates, social and cost inflation as well as a prolonged period of above-average natural catastrophe losses.
Berenberg’s key takeaway from its discussions around the virtual Monte Carlo event this year is that reinsurance rates need to rise further, given that the hard insurance market is not currently driven by capital supply constraints.
With an estimated $85 billion of natural catastrosphe losses already booked and with more than a month of hurricane season to go, analysts believe that 2021 could be another record-breaking year.
