Reinsurance renewals news

Reinsurance capital supply is set to outstrip demand at certain return periods, according to Howden Tiger’s Head of North America Reinsurance, Wade Gulbransen, who explained that, as a result, the broker is asking clients and markets to look at how frequency cat loss issues can be addressed.

Rating agency AM Best is maintaining its stable outlook for the global reinsurance industry, but noted that new capital remains cautious on the sector despite a growing need for more of it to flow in.

Catastrophe exposed commercial property insurance renewals are expected to see some of the biggest rate gains in 2024, as pressure continues and a challenged reinsurance market drives buyers towards alternative solutions, to offset rising rates.

Fitch Ratings forecasts that property catastrophe reinsurance renewal rate increases will decelerate in 2024, with an average increase expected to be below 10% at the January renewal season.

Recent results from major Italian primary insurance companies have clearly evidenced that reinsurance terms, conditions and higher attachments are driving higher retention of catastrophe losses, eroding insurer performance, Fitch Ratings has highlighted.

Global reinsurance giant Swiss Re has said that it forecasts insurance industry losses from natural catastrophe events will exceed US $100 billion again in 2023, leading it to also forecast that non-life hard market conditions will be sustained through 2024, at least.

With the fourth-quarter of the year an important time for the property insurance market, not least as the peak reinsurance renewal season approaches, broking giant Aon has made considering catastrophe bonds the top recommendation for insurers looking to navigate what can be a challenging time.

Property catastrophe reinsurance capacity is expected to remain relatively flat at the January 2024 renewals according to a survey from broker Gallagher Re, which also suggests that reinsurer appetite for writing aggregate coverage and lower-layers remains limited.

Marcel Grandi, Head of ILS Sourcing at insurance-linked securities (ILS) and reinsurance asset manager, Twelve Capital, expects price increases to be limited in 2024, but is positive for the future as reinsurers continue to cede a sizeable portion of their exposure to the retrocession market.

As 2024 fast approaches, analysts at investment bank Morgan Stanley currently don’t see any sign of headwinds to affect reinsurance pricing for the renewals and into the next year, with capital supply remaining balanced in the sector.