June 22, 2024

Guy Carpenter pegs 1.1 property cat rate on line at 5.4%

Global property catastrophe treaty renewed at the 1.1.2024 at a 5.4% for the market’s key pricing metric, the Guy Carpenter global rate on line index, the seventh straight year of increase, the reinsurance brokerage said following the annual renewal exercise. 

“Outcomes were affected by regional loss activity, structure adjustments and ongoing scrutiny of pricing adequacy,” Guy Carpenter authors said of pricing variation. 

The 5.4% reading represents a notable cooling from the 27.5% increase suffered in the prior year renewal event. 

Guy Carpenter’s regional sub-index for the US market rose by 5.25%, down from 31.3% at the 1.1.2023. The European market measure rose by a higher 7.6% at the 2024 renewal, also a notable cooling from the prior year’s 30% gain. 

The Guy Carpenter rate on line index is a measure of the change in dollars paid for coverage year on year on a consistent programme base. The index reflects the pricing impact of a growing (or shrinking) exposure base, evolving methods of measuring risk and changes in buying habits, as well as changes in market conditions. 

Unlike risk-adjusted measurements, the index is not dependent on the model or method used to measure the amount of perceived risk in a program, which can vary widely, the brokerage noted. 

Guy Carpenter had previously defined the 1.1 renewal as on where “pricing remains firm, but capital is plentiful.” 

Guy Carpenter had put risk-adjusted global property cat average rate changes from near-flat to single-digit for non-loss impacted account, but up 10%-30% for loss-impacted programs. Upwards price pressure was highest in the low layers of programmes.

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