Clients with excellent loss experience should feel a lot more optimistic going into their 2024 renewals, according to Mark Hubbard, Managing Director, Global Property, Gallagher Specialty.
Speaking in the firm’s global property insurance market update, Hubbard stated that the catastrophic events of the past few years have presented many challenges to both the insurance and the reinsurance sectors, along with the consequences of the broader economic impact on clients.
However, Hubbard observed that the treaty reinsurance market at 1.1 2024 was “far more orderly” than in the prior year.
This was reportedly encouraged by a benign 2023 US hurricane season and the prospect of “much improved” annual underwriting results for both insurers and reinsurers.
“This is despite global catastrophe insured property losses likely to exceed $100bn in 2023, with this amount being largely driven by severe convective storm losses in the USA, which are currently estimated to be totalling around $60bn,” Hubbard added.
He also noted that in recent weeks, there have been some “encouraging signs” from London property insurers, with many advising that they have increased capacity for 2024, both in terms of overall aggregate and in several instances, increased line size for 2024 renewals.
“Some of the additional capacity will also come from internal carrier capacity redeployment from less profitable lines of business or where they have closed down their trading divisions, as has been the case in a few instances where syndicates are no longer trading in treaty reinsurance,” Hubbard said.
He concluded, “Initial indicators are that with inflation easing, property valuation increases will be moderated for 2024 renewals.
“An improvement in capital to the property sector whether externally raised or internally redeployed will certainly assist in our 2024 renewal negotiations.”
