Bodily injury fears pushing prices up by as much as 10%, says Willis Re renewals report
UK motor reinsurance rates are defying the global trend for softening, according to reinsurance broker Willis Re’s report on the 1 June and 1 July renewals.
But UK insurers are continuing to enjoy competitive rates for property/catastrophe reinsurance cover.
UK motor rises
Willis Re’s report said that motor liability rates in the UK have generally shown rate increases of up to 10% for renewals, with broadly similar year-on-year exposures.
It said that the UK, along with France, was defying the general softening trend in motor liability because of developments in the long-term settlement of severe bodily injury claims.
In the UK, for example, there has been an increased use of periodic payment orders to settle claims, which leaves the insurer on the hook for claims for an indefinite period.
Willis Re said this trend had led to an increasing value in motor excess-of-loss cover, a reduction in the supply of reinsurance capacity and so an increase in rates.
Elsewhere, Willis Re said capacity for international motor liability remained “reasonably abundant”, with price cuts of up to 10% “not uncommon”.
Despite the increase in UK motor reinsurance rates, Willis Re said catastrophe excess-of-loss reinsurers continue to offer competitive terms for UK property-catastrophe treaties.
It added that capacity for UK excess-of-loss cover remains plentiful and that reinsurers providing proportional cover are offering buyers favourable changes to terms to avoid losing business to competitors.