According to executives at large European reinsurer Hannover Re, the current market environment is anticipated to prevail at the upcoming April and mid-year renewals.
As reported earlier, the German reinsurer achieved an inflation and risk-adjusted price increase on renewed business of 2.3% at the 1/1 2024 treaty renewals in traditional property and casualty (P&C) reinsurance.
According to the firm, the market environment for the 1/1 renewals proved to be “more stable than in the previous year”, with demand for reinsurance capacity, which was limited primarily to covers from existing market players, growing.
Speaking this morning on a call to discuss the firm’s renewal outcome and outlook for the year ahead, Jean-Jacques Henchoz, Chief Executive Officer of Hannover Re, said that the company expects “the current market environment to prevail for the upcoming April and mid-year renewals.”
Sven Althoff, a member of Hannover Re’s Executive Board responsible for P&C reinsurance, reiterated the CEO’s point, explaining that the reinsurer is “expecting a broadly similar situation compared to the 1/1 renewals.”
Althoff continued, “Japan is very prominent on the 1st of April. The recent earthquake was a reminder of the exposure in that region and given that at 1/1 we were still in a very disciplined market environment, I’m certain that this will play a role when we are looking at the pricing for that Japanese business.
“As for the 1st of July, while we are not a big player in, for example, the Florida renewals at 1/6 and 1/7, it is fair to say that the US cat renewals are more flattish than some of the rest of the world.”
Speaking on Australia’s outlook, Althoff stated, “It’s too early to say because we are still in the midst of the main reporting season there, which is 1st of July to 1st of July.
“The first half of that period already has seen some loss activity, which should lead to at least a stable pricing environment. But we may see further loss activity in that part of the world, which may then drive prices further up. But as I said, a little too early.”
With all this in mind, Althoff added that for the traditional business, the 1st of January renewal “should be a good indicator” for what to expect from a premium growth point of view in the firm’s portfolio.
Althoff concluded, “We will also continue to be very disciplined in our underwriting. So, be that the 1st of April or the 1st of July, there may also be some transactions where we want to reduce positions. There’s nothing in the pipeline, we expect a similar picture with some ups and downs.”
