In a recent announcement, global risk and reinsurance specialist Guy Carpenter, has highlighted the emergence of a responsive reinsurance market during the January 1st, 2024, reinsurance renewals.
This market shift is attributed to ample capacity and a more commercial approach to trading partnerships, all while maintaining a commitment to underwriting rigor.
The rebounding capital in the sector, coupled with healthy returns estimated to be around 20% for 2023, drove an increase in reinsurance capacity through the end of the previous year, the report noted.
Collaborating with AM Best, Guy Carpenter estimates that total dedicated reinsurance capital surged by 10% compared to the year-end of 2022.
Importantly, this growth was attributed to existing reinsurers, marking a departure from previous years that often saw the entry of new players following market corrections.
“The January 1 market reflected more balanced trading conditions, providing cedents improved opportunities to achieve their objectives while maintaining key reinsurer relationships,” noted Dean Klisura, President and CEO of Guy Carpenter.
Technical discussions played a pivotal role in reinsurers’ increased appetite and capacity allocations.
Under these conditions, reinsurance capacity ranged from adequate to ample for the completion of programs across various classes, contingent upon meeting price and structure thresholds.
The market displayed heightened contract-level consistency in both wording and structural variations, indicating a collaborative effort among all parties to achieve balance in a complex market.
These positive developments contributed to a smoother January 1 renewal period compared to the challenges faced at the year-end of 2022, says the reinsurance broker.
Despite overall improvements, certain geographies and client segments encountered difficulties in reaching market-clearing pricing and structure.
Outcomes were contingent on loss experience and data-driven insights, reflecting reinsurers’ commitment to a more profound understanding of portfolio dynamics. Unlike the focus on property renewals in the previous year, the casualty segment faced increased scrutiny in this renewal cycle.
Also read: Property cat renewals flat to up 30%, as casualty sees price pressure: Guy Carpenter.
