Guy Carpenter has warned the upcoming January 1 renewal season and related negotiations will likely be “lengthier and more complex” because of COVID-19 and significant adverse developments in commercial automobile and general liability.

Medical professional liability and other liability are also showing signs of adverse developments in recent periods, adding to the pressure.

Increased loss frequency in long-tail lines is also another factor, with the losses dominating in

pre-renewal discussions. The increased loss frequency and severity is squeezing carriers’ margins, driving loss cost trends higher.

The positive trends such as rising primary rates, recovering asset values and flood of new capital entering the market are not enough to improve reinsurers’ risk appetite, the reinsurance broker says.

“COVID-19 loss development continues to be slow and highly uncertain. This will be a factor at January 1 for individual renewals and may potentially affect reinsurers’ overall willingness to deploy capital.

“Based on these various factors, January 1 renewals and related negotiations are expected to be lengthier and more complex than in prior years.”

Guy Carpenter says the average of all public COVID-19 losses are estimated at $US66 billion ($89 billion) and the reported losses attributable to the pandemic through third-quarter earnings announcements to date are slightly over $US25 billion ($33.8 billion).