Property catastrophe rates spiked 15-25% at the April and June renewals on loss-affected accounts, particularly in Japan and Florida, S&P Global Ratings says.

It describes the trend as encouraging for reinsurers that have endured below-average prices in recent years.

“For global reinsurers, 2019 pricing’s green shoots look promising,” the ratings agency says in a report.

“We don’t feel the current reinsurance pricing environment is a hard market, but a firming one. The question is: will the recent green shoots take root and lead to sustainable profitability, thereby enabling reinsurers to earn their cost of capital, or will they wilt over time? Thus far, the trend looks promising.”

In the Florida market, property catastrophe rates recorded double-digit rises at the June renewals, and Japan also experienced a solid season.

On Florida, S&P says: “The market can’t be characterised as a hard one, but rate improvements are heading in the right direction, signalling momentum towards desired risk-adjusted pricing.”

Projections suggest rates globally are in line for mid-single-digit rises over the next year, assuming a normal catastrophe year.

“The recent April and June renewals only served to reinforce the recent trend of regionalised reinsurance pricing movements,” the ratings agency says.

“In other words, there’s no rising tide that lifts all boats, but rather targeted price increases limited to policies and regions affected by losses, without material spillover effect to other lines of business or regions. Having said that, reinsurers’ sentiment is in general more positive, and they’re more willing to push for price increases across business lines.”