The “redistribution of risk” between primary insurers and reinsurance capital providers that occurred in 2023 has now helped to encourage and rebuild appetites, resulting in more reinsurance capacity being available at the April 1st renewals, Gallagher Re has said.
In particular this has been evident in the property catastrophe and specialty reinsurance sectors, the broker noted, and this has led to more stable conditions at the renewal.
At the same time, it has also helped to encourage more demand, resulting in better pricing and more capacity being available, so a far more calm renewal environment than was seen a year earlier.
In the property catastrophe reinsurance market, Gallagher Re notes a “continuation of reinsurance markets taking on more risk in search of the growth seen at the January 1st renewal.”
As a result, there was more available capacity for property catastrophe reinsurance programs and “incremental improvement” in risk-adjusted pricing at firm-order-terms, which the broker noted was “primarily at the top end of property programs.”
Interestingly, Gallagher Re noted that multi-class placement strategies were more prevalent, as buyers looked to capitalise on reinsurers appetites to write more property catastrophe business.
These multiclass placement strategies helped to support more challenging property per risk and casualty treaties, Gallagher Re said.
In addition, thanks to the increased level of reinsurance capacity being made available, Gallagher Re noted that property and specialty buyers were able to “secure improved terms and support in non-catastrophe areas.”
Gallaher Re CEO, Tom Wakefield, commented on the state of the reinsurance market at the April 1st 2024 renewals, “Broadly, the market has more capacity available, which is really encouraging. Industry capital has gone up by about 12% thanks to better combined ratios, fewer losses from natural disasters, and improved investment income.
“This means there’s more room to accommodate clients’ needs and should lead to better terms and conditions as a result. However, recent events in Baltimore remind us of the ever-changing dynamic market we are operating in.”
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