The re/insurance market has absorbed the elevated level of small and medium sized catastrophe events around the world so far this year, which will ensure pricing remains robust for the remainder of 2024 and beyond, leading Gregory Roberts, Chief Underwriting Officer (CUO) at reinsurer Conduit Re, to be positive on the upcoming renewals.
In a recently held Q&A session following the release of a solid set of 9M 2024 results, which included a more than 30% rise in reinsurance revenue and over 25% gross premium growth, Bermuda-based Conduit Re’s Roberts discussed the outlook for the property catastrophe market at 1.1 in light of recent events in the US and Europe.
“The outlook is very positive,” said Roberts. “I think the market is very stable, and when we say stable, risk-adjusted rate increases staying ahead of inflation are key here, and that’s our observation. A lot of cat activity around the world, again. Including Milton, no major big vertical but an awful lot of small and medium sized events. The industry has absorbed those, that will maintain robust pricing both for the remainder of the year and looking further afield than that as well.”
In Europe specifically, Roberts foresees a tough market at the January 1st, 2025, reinsurance renewals, which are weighted more towards the continent, with US renewals largely occurring at the mid-year, and Japan renewals in-between at April 1st.
“I think those losses (European floods) are probably more on the severity side of things, given the smaller market. Very difficult scenarios in Spain, flash flooding, etc, and unfortunately, a large loss of life. So, these are difficult events. The industry is there. It’s a reminder of the value of the insurance product in maintaining commercial goods and services and livelihoods… and staying ahead of inflation is key there,” said the CUO.
For the nine month period ended September 30th, 2024, Conduit Re’s overall risk-adjusted rate change, net of claims inflation, was 1%, with 3% in property and 1% in specialty, partially offset by a 1% decline in casualty.
The multi-line carrier grew its property and specialty books by 32.9% and 39.3%, respectively, during the period, while the casualty portfolio expanded by 2%.
In light of this growth, Trevor Carvey, Chief Executive Officer (CEO), commented on some of the broader classes and areas that the firm may be more interested in or more focused on.
“The general specialty classes that we see traditionally are lower in cat correlation and have got the adequate margins, and the ability to pay their way in terms of cost of capital. So, those classes in specialty interest us now. We’ve been growing in them, as shown in the premium growth this quarter, and still continue to do so,” said Carvey.
“Probably just a reminder that we don’t transact motor or auto, and we’re very light in the political risk exposed classes, which are covered often in the specialty banner, and those for us are classes we’re very much underweight in, and that’s deliberate,” he added.
