Reinsurance renewals news

Once again, the availability of retrocessional reinsurance capital and capacity has been cited as a factor that helped to ease the January 2024 reinsurance renewals, with Aon saying it was a factor that drove a “relatively smoother” renewal outcome for cedents.

Australian primary insurance group IAG has renewed its main catastrophe reinsurance tower up to $10.5 billion for calendar year 2024, with the firm’s CFO citing the more stable reinsurance market as allowing the company to purchase more reinsurance than had been anticipated.

Inflows of capital to certain insurance-linked securities (ILS) managers and structures has helped in moderating retrocession pricing at the January 2024 renewals, resulting in a much less stressed market and better outcomes for some retro buyers.

While the lack of significant US wind loss events in 2023 has helped to moderate the outcome for many property catastrophe reinsurance renewals at 1/1, US reinsurance towers that had seen losses over the course of the year have experienced rate-on-line increases of up to 50%, broker Gallagher Re said today.

Despite there being some evidence of softening at higher and more competitive layers of reinsurance and retrocession, analysts at KBW expect 2024 will deliver strong catastrophe reinsurance profitability, loss activity allowing.

The January 1st 2024 reinsurance renewals saw a more stable market environment thanks to more favourable supply dynamics, but still property catastrophe rates-on-line are estimated to have risen by 3%, according to broking group Howden.

The reinsurance market saw a dynamic emerging around the key January 1 reinsurance renewals where pricing has remained firm, while capital has proven to be plentiful, Guy Carpenter’s Chairman David Priebe has said.

Property catastrophe reinsurance renewals saw another wide range of outcomes even in a more orderly market, as capacity providers still demanded steep increases for programs that had been loss-affected during the last year, with global property cat rates seen as ranging from flat to up by 30%.

Sources of retrocessional reinsurance capital appear in greater supply at this January renewal season than a year ago, which has applied some pressure to rates-on-line at higher, more remote layers, while also shifting more of the balance of power back towards buyers in some cases, we understand.

At the January 2024 renewals, reinsurance markets are not budging on the higher retentions and tighter terms and conditions they have fought had to install over recent years, according to JMP Securities analysts.