Monte Carlo Reinsurance Rendez-Vous news

There is rising interest in catastrophe bonds from potential sponsors and the parametric risk transfer space is another area seeing growing momentum, according to Mike Van Slooten, Head of Business Intelligence at Aon’s Reinsurance Solutions.

Speaking during a briefing in advance of the 2024 Monte Carlo Rendez-Vous event today, executives from Aon’s Reinsurance Solutions highlighted their expectation that the higher layers of property catastrophe programs will be competitive at the renewals, with softening of rates expected.

Fitch Ratings has said that it believes the reinsurance pricing cycle has now most likely passed its peak, but the rating agency is still bullish on profitability of reinsurance and thinks returns from the sector “should remain very strong by historical standards in 2025.”

Broking group Aon has set out its stall for the reinsurance renewals, calling on reinsurance capital providers to run towards risk instead of away from it, else risk the industry becoming less relevant.

As the reinsurance market heads to the annual Monte Carlo Rendez-Vous event, to begin discussions that help to shape the pathway towards end-of-year renewal negotiations, we spoke with Urs Baertschi, CEO of P&C Reinsurance at Swiss Re, who told us that market discipline is expected to be maintained.

New sponsors should continue to come to the catastrophe bond and insurance-linked securities (ILS) market through the remainder of 2024 and into 2025, while inflows of alternative capital are expected to continue, according to Guy Carpenter’s CEO of EMEA and Global Capital Solutions, Laurent Rousseau.

Alternative reinsurance capital, largely deployed in insurance-linked securities (ILS) formats, saw strong growth in the third-quarter of 2023 to end that period at a record high of $103 billion, while for the full-year ILS structures have delivered the best performance in their 20+ year history, broker Aon has said.

With the focus of ILS managers now shifting towards the all-important end of year reinsurance renewals, Stephan Ruoff, Global Head of Schroders Capital ILS, explained to us that insurance-linked securities (ILS) portfolio construction and positioning are a key focus at his firm.

Capital raised in reinsurance and insurance-linked securities (ILS) is not expected to be overly disruptive to pricing at the end of year renewals and into 2024, analysts at investment bank Morgan Stanley have said.

Investor interest in insurance-linked securities (ILS), particularly on the private ILS and reinsurance side of the market, can be enhanced with a continuation of the prudent approach to underwriting currently being seen, Marcel Grandi, Head of ILS Sourcing at Twelve Capital told us.