Reinsurance renewals news

Hurricane Ian’s impacts in Florida and on its property insurers could have sounded a death knell for many of them, were it not for the support they’re receiving from their catastrophe reinsurance arrangements, ALIRT Insurance Research has said.

Some new reinsurance capital could begin to flow in advance of the Florida focused June renewal season at June 1st 2023, according to Chris Dittman, Head of Florida Strategy at Aon’s Reinsurance Solutions.

The January 2023 treaty reinsurance renewals are running far behind their usual schedule, with only around 5% of the treaty market reportedly having cleared so far, and rate increase indications seemingly rising, analysts at KBW found after a trip to meet with re/insurance executives in Bermuda.

The Board of the Texas Windstorm Insurance Association (TWIA) is being urged to enter the catastrophe bond market and plan for a renewal of expiring Alamo Re notes sooner than normal, as market conditions could make the placement more challenging.

Hurricane Ian is seen as an additional catalyst for hardening reinsurance rates, by global giant Swiss Re, who warns that its impact “will extend beyond Florida and add to pre-existing drivers of rate increases such as claims inflation.”

In a report on the challenged Florida property insurance marketplace and legislative efforts to reform the sector, rating agency AM Best has warned that reinsurance costs could reach breaking point at June 2023’s renewals, surpassing the level of affordability.

Analysts at investment bank Goldman Sachs have concluded that US property catastrophe reinsurance rate increases may fall above 50% at upcoming renewals, while other areas of the world are also likely to see some of the steepest increases in two decades.

The Lloyd’s insurance and reinsurance marketplace is ready to support its participants response to the opportunity presented by rising rates in property and catastrophe business and the market may support updated business plans that seek to capitalise on this, Chief of Markets Patrick Tiernan suggested today.

The California Earthquake Authority (CEA) was unable to fully renew all of its expiring reinsurance at October 1st resulting in a further shrinking of its risk transfer program and now the CEA is unsure whether it can renew all its expiring limit at the January 1st 2023 renewal as well.

While almost the entirety of the January 1 2023 reinsurance renewals are running late so far and quotes are seen as still thin on the ground, this is especially the case in retrocession, we’re told, where demands from capital providers for rate increases are also seen as particularly significant.