New JLT Re Report Explores the Uncharted Territory Facing the Reinsurance Sector

24 January 2019

  • The muted pricing response to two years of elevated losses is testing carriers’ capital resilience, and third-parties’ reinsurance appetite
  • A lack of clarity around loss development and pricing adequacy is likely to see pressures persist in 2019, albeit offset by strong capitalisation levels

JLT Re, the global provider of reinsurance broking and consultancy, has today launched a new report titled Uncharted Territory at its Market Prospective Event. The paper provides an in-depth assessment of the 1 January 2019 renewal by closely analysing outcomes by individual lines of business. A more forward looking view is also conveyed by exploring some of the key drivers that are likely to influence reinsurance pricing and supply over the coming year.

Ross Howard, Executive Chairman & Interim Global CEO, JLT Re says, “The 1 January renewal provides an early glimpse into how the reinsurance market is likely to develop in 2019. Whilst the property market continues to garner the headlines, changing dynamics in the casualty space are shaping up to be a prominent feature of the year. After years of largely favourable conditions that included a benign inflationary environment and historically low loss experiences, increasing claims severity, social inflation and instances of adverse reserve development are now hurting carriers and point to a market in transition.”

The 1 January 2019 renewal reflected a myriad of competing factors that are currently restraining pricing movements in most business lines. Crucial to this outcome is reinsurers’ overriding desire and ability to underwrite risks. Market conditions are nevertheless tightening in some areas as reduced appetite, as well as increasing demand, is being observed for business classes that have suffered sizeable losses or where performance has deteriorated in recent years, including US casualty.

More than USD 200 billion of insured catastrophe losses in the last 18 months, loss creep from some of these events, moderating insurance-linked securities (ILS) capital inflows and reduced capacity at Lloyd’s are also likely to resonate this year. Historically high levels of excess capital will nevertheless continue to weigh against these dynamics, and this has long been the dominant reinsurance pricing driver.

David Flandro, Global Head of Analytics, JLT Re, said, “Such a backdrop, coming at a time of macroeconomic transition and capital market volatility, leaves the reinsurance market delicately poised as it enters 2019. With attention already focused on key renewals dates later in the year, it is crucially important for reinsurance buyers to have detailed insights into key market drivers.”

To view the report download here or contact Izzy Gaster.



Isabella Gaster
Tel: (+44) 7920 586 032


JLT Re is the world’s fourth largest reinsurance broker, with approximately 800 professionals across 38 locations in 18 countries, delivering world class risk analysis and risk transfer solutions.

Our deep specialist knowledge and extensive experience of both the reinsurance market and clients’ own industry sectors enables JLT Re to deliver innovative solutions tailored to meet client needs.

We provide clients with broking and consultancy services across all classes of treaty and facultative reinsurance, including aviation, marine & energy, terrorism & political risk, trade credit, life accident and health, cyber, workers compensation and structured products.

JLT Re has a proven capability to provide a range of advisory and capital markets services specifically to insurance industry clients on a global scale.

Our ground breaking proprietary modelling tools and market leading analytical capabilities and personnel enable us to bring analytical rigour and a unique perspective to clients.  

JLT Re is part of the Jardine Lloyd Thompson Group plc.

About Jardine Lloyd Thompson

Jardine Lloyd Thompson is one of the world’s leading providers of insurance, reinsurance and employee benefits related advice, brokerage and associated services. JLT’s client proposition is built upon its deep specialist knowledge, client advocacy, tailored advice and service excellence.

JLT is quoted on the London Stock Exchange and owns offices in 40 territories with more than 10,600 employees. Supported by the JLT International Network, it offers risk management and employee benefit solutions in 135 countries.

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