In the latest Amwins State of the Market report for 2024, the reinsurance landscape appears to be experiencing subtle shifts, with notable developments in property and casualty sectors.
The report notes an overall moderation in treaty reinsurance renewals and facultative buying, with property rates continuing to increase.
However, there are indications that the market may be softening in specific classes and geographies. The July 1, 2023, treaty renewals were notably less contentious, marked by increased organisation, reduced private placements, and improved concurrence around terms and conditions.
The influx of new capacity from London and Bermuda seeks opportunities in the current rate environment.
Facultative buying remains at unprecedented levels, with reinsurers offering capacity as long as pricing parameters are met. The “rightsizing” of portfolios is nearly complete, bringing a semblance of stability into 2024.
Carrier retentions have increased, particularly among excess and surplus (E&S) carriers, aiming to manage catastrophe exposures and protect balance sheets in an uncertain environment.
In the casualty sector, the report indicates available capacity due to new entrants, though reinsurers have pulled back slightly on general liability (GL) due to previous pricing declines.
Products liability remains soft as new carriers expand their underwriting appetite. The report raises questions about the sustainability of aggressive pricing in this long-tail segment.
Auto liability experiences a tightening trend, with primary rates increasing, and excess layers showing signs of firming, especially in tractor fleets and large commercial schedules. Accounts with deteriorating loss experiences are witnessing double-digit rate increases and pullbacks.
As buyers, faced with unfavorable terms, increasingly choose to retain more risk, either through higher attachment points or retentions, primary markets are expected to see results volatility in 2023 and 2024. This may necessitate further capital infusion to navigate uncertainties.
