The broker noted that, while there remains an abundance of headline insurance capacity in the political risk space, actual capacity is down due to a number of factors.
These include the continuance of some markets reining in their appetite, mergers and acquisitions activity, and insurers exiting the class.
Alongside a similar tightening of appetite and recent exits among reinsurers, overall reinsurance capacity has reduced markedly both in terms of proportional and non-proportional support.
Willis Re also pointed to an uptick in claims frequency in the political risk segment, which has replaced the slowdown observed in recent years.
In terms of the trade credit space, Willis Re noted that insurers are generally reporting low loss ratios for 2018 and 2019, owing to a riskier global environment characterised by slowing economic growth and trade wars.
However, multi-year reinsurance programs continue to provide a measure of stability for both buyers and reinsurers in this market, analysts added.
Reinsurance market appetite remains generally stable for trade credit, and Willis Re believes terms and conditions were mostly flat at renewals.
This is despite some reinsurers withdrawing from the trade credit reinsurance class following claims from the collapse of Thomas Cook, which impacted both trade credit and surety markets over 2019.