In a recent Reinsurance News poll, industry experts and observers identified “getting more exposure data” as the most important factor for upcoming property catastrophe reinsurance renewals, with 44% of respondents selecting this option.
Stable retentions/T&C came second, with 28% of the respondents selecting this option. 24% selected sustaining price, while only 5% of the respondents see continued demand growth as the most important factor.
Getting more exposure data helps reinsurers make better-informed decisions, manage risk more effectively, and price policies more accurately.
It also allows reinsurers to improve their catastrophe modelling, and in turn, to respond more efficiently to catastrophic events, as well as to comply with regulatory requirements.
January 1 renewals are expected to be fairly stable, with property catastrophe reinsurance pricing remaining relatively flat, according to analysts at RBC Capital Markets.
This is due to lower-than-anticipated losses from hurricanes Helene and Milton not developing as adversely as original forecasts from cat modelers.
Increased capacity and profitable combined ratios have boosted reinsurers’ appetite for property and cat business, leading to greater competition. Casualty rate increases are expected to vary by line, averaging around mid-single digits.
Analysts at JMP Securities and TD Cowden share similar views, predicting property cat rates to be flat to down as much as 10% at January 1, this despite expectations of terms and conditions remaining stable.
TD Cowen noted that private companies would rather hold the line and take a rate cut than start loosening terms and conditions after the structural changes achieved in recent years.
Goldman Sachs also predicts an orderly 2025 reinsurance renewal season, expecting property cat pricing to decline by 5-15 percentage points at January 1.
RBC Capital Markets predicts strong demand for reinsurance throughout 2025 as insurers seek protection from potential losses.
However, they anticipate the June 1 renewal period may be tougher to navigate due to the impact of recent hurricanes in Florida, which could make reinsurers more cautious about taking on risk in that region.
