Willis report on 1 January renewals shows price hike
Credit insurers faced 40% reinsurances rises and cuts in commission they receive in the January 1 renewal period, broker Willis has told the FT.
“If reinsurance costs go up, it makes [credit insurers’] life more difficult,” The FT reports James Vickers, chairman of the international division of Willis Re, Willis’ reinsurance unit, as saying.
It says Willis will also say in a report that many reinsurers are cutting back on the cover offered to credit insurers, with some smaller operators pulling out of the market.
Reinsurance will remain “very scarce” and conditions “very tough for buyers”.
The FT says: “Credit insurers typically protect themselves by sharing a fixed proportion of the risk and reward on every policy with a reinsurer. In return, the credit insurer receives a commission. Mr Vickers estimated that commissions fell by between 5% and 15% on renewal."
