The April 1st, 2024, reinsurance renewals were “more predictable and generally favorable to reinsurance buyers,” with pricing broadly flat for property catastrophe reinsurance, according to insurance and reinsurance broker Aon.
Aon’s latest Reinsurance Market Dynamics report, scheduled to be released on April 2nd, reveals that market conditions since 1/1 2024 have continued to favour reinsurance buyers, with the broker noting a “dramatic shift towards ample property catastrophe reinsurance capacity”.
According to Aon, this is being driven by attractive levels of risk-adjusted returns which have been experienced over the past year.
At the 1/4 renewals, around 60% of Asia treaty business renews, with some of the world’s largest catastrophe programs renewing in Japan, alongside large portfolios of business renewing in regions such as South Korea, China, and India.
Aon reports that property catastrophe renewals in Japan reinforced the positive trends seen in the U.S. at the January renewals, with pricing flat to slightly reducing. In South Korea, China, and India, there was also greater competition for cat business, although this varied.
Although property cat pricing was flat for the most part, Aon says that certain Asia Pacific markets and product lines remained challenged and subject to a tightening in terms and conditions. This includes property per-risk reinsurance, industrial fire accounts, certain natural catastrophe loss-affected regions, and U.S. exposed casualty treaties.
April 1 is also a key renewal date for facultative reinsurance, and while this product is not utilized broadly across the Asia Pacific region, Aon notes that reinsurers displayed an increased appetite for facultative business at 1/4, while new players continue to enter the market such as managing general agents.
In India, the April 1 renewals saw new opportunities for sellers of protection, driven by the fact the country’s forecast position as the fastest growing insurance sector of all G20 countries over the next five years.
“The April 1st reinsurance renewals were more predictable and generally favorable to reinsurance buyers. As mid-year renewals get under way for the catastrophe-exposed markets of Florida, Australia and New Zealand, reinsurers are indicating a strong appetite for catastrophe risk,” said George Attard, CEO of Asia Pacific for Aon’s Reinsurance Solutions.
“We would expect the positive trend of the January and April renewals to continue at mid-year renewals, with adequate capacity for property catastrophe risks and enhanced pricing competition. Insurers looking to purchase additional limit will also find adequate capacity to meet their needs,” he added.
