Reinsurance renewals news

Australian primary insurance group IAG has renewed its $10 billion catastrophe reinsurance tower for 2023, but the insurers maximum first-event retention has risen 75%, which the company said was in response to inflation and global reinsurance market conditions.

Rates-on-line for non-marine catastrophe retrocessional reinsurance are now up approximately 165% on their 2017 lows, analysts at Jefferies have pointed out using data reported by broking group Howden.

Palomar Insurance Holdings, the speciality California-headquartered insurer that offers largely catastrophe exposed property products, has renewed some of its earthquake reinsurance, buying incremental limit as well, despite what its CEO terms an “unquestionably” hard reinsurance market.

Towards the end of the year, as the challenging January 2023 reinsurance renewal season neared its completion, lower than expected loss estimates related to hurricane Ian eased some concerns related to trapped ILS capital and this assisted in clearing retrocession placements, broker Gallagher Re said today.

Risk-adjusted non-marine catastrophe retrocession excess-of-loss rates-on-line rose by 50% at the January 2023 renewals, while global property catastrophe reinsurance rates rose 37%, according to international broking group Howden.

Despite a particularly bruising January 2023 reinsurance renewal season that broker Gallagher Re calls tense and late, the market is reported to have resolved many of the issues holding up clearing and the renewals are largely complete.

Reinsurance capital levels experienced additional downward pressure through the second-half of 2022 according to Guy Carpenter, but the broker also highlighted some new capital inflows in the final month of the year.

In general, reinsurers are achieving north of 35% rate increases for January 1st 2023 property and catastrophe reinsurance renewals, according to Stonybrook Capital, with the company expecting hard market conditions to persist through the new year.

Reinsurance broker Guy Carpenter has claimed that, despite the evident challenges at this reinsurance renewals, “placements were largely completed at client issued structures and pricing,” while the broker also says that reinsurer views at the outset threatened “to erode the core value of the reinsurance product.”

The reinsurance market is renewing much harder at these 1/1 2023 renewals and while the market resets its pricing baselines higher, for property and catastrophe risk in particular, we ask can those baselines be sustained this time around?