Reinsurance renewals news

After incorporating data from the mid-year renewals, global property catastrophe reinsurance rates are now estimated to have risen by approaching 30% year-to-date, according to Guy Carpenter.

Moody’s Investors Service has surveyed reinsurance buyers and found that more than 70% of respondents expect reinsurance prices to continue to rise into 2024.

For the global reinsurance industry, the stakes are particularly high this wind season, as the occurrence and landfall of any hurricanes that caused significant losses could propel rates even higher, while a “super-clean” wind season could lead to softening in 2024, analysts at Berenberg have said.

With pricing for retrocessional reinsurance having soared over the last couple of years and global reinsurance firms reducing their appetites for natural catastrophe risk, S&P Global Ratings believes this could drive a reduction in the use of retro protection.

Analysts at J.P. Morgan are of the view that it doesn’t matter whether the Atlantic hurricane season proves impactful, or not, the resolve of the reinsurance community when it comes to pricing and terms is strong, with softening only expected to be slight even if the season results in below-normal losses.

Rating agency AM Best believes that in the current hard market cycle, reinsurance companies are likely to preserve their underwriting discipline for longer than in previous cycles, suggesting rates could hold better this time than has been seen in the past.

The CEO of one of the world’s largest reinsurance companies said today that he believes the current hard market conditions can sustain into 2025, as the sector faces numerous pressures still.

Global reinsurer Munich Re shrank its property and casualty (P&C) reinsurance book by 1.9% at the July reinsurance renewals as it chose to discontinue select business, although prices were up overall and sufficient to offset higher loss expectations from inflation and other developing trends.

German reinsurer Hannover Re has purchased a significant amount of retrocession protection in 2023, and while this has limited its growth appetite in the natural catastrophe space, the company has sufficient room to expand its appetite should opportunities present themselves, according to Sven Althoff, Member of the Executive Board, P&C, Hannover Re.

The catastrophe bond market is seen as a bright spot when it comes to reinsurance capital inflows, but overall the market’s capital base remains pressured, although property catastrophe risks appear to have found a pricing equilibrium, Aon’s senior leadership said recently.