After an excellent outcome for Everest at the January and April 2024 reinsurance renewals, the Bermuda-based firm is expecting “terrific” risk-adjusted economics at the mid-year renewals and a continuation of market discipline, according to Jim Williamson, Executive Vice President (EVP) and Group Chief Operating Officer (COO).
Speaking recently during insurer and reinsurer Everest’s Q1 2024 earnings call, following the release of a solid set of quarterly results which included record underwriting income, executives at the carrier commented on this year’s renewal periods.
“We had a terrific 1/1 renewal and we had an excellent 4/1 renewal. So, at this point in time, we’ve got close to 70% of our book that’s been renewed at what we believe are excellent risk-adjusted returns. The market, for us, continues to be pretty good,” said Juan Andrade, President and Chief Executive Officer (CEO).
Andrade went on to explain that from a pricing perspective, one would expect some of the pricing to moderate given there’s been rate on rate on rate, particularly in certain geographies over time.
“But I think more importantly is the fact that attachment points and terms and conditions have continued to hold. And I think that is a critical point to keep in mind going forward for the future,” he added.
Group COO Williamson reiterated Andrade’s points about the very positive outcome of the January and April renewals for Everest.
“You would certainly have expected given how much rate the market took last year that more underwriters are going to be interested in writing the business,” he said. “And while that’s true, we’ve also seen just the floor under the discipline that people are applying to this market, which is what is sustaining terms and conditions, keeping risk-adjusted rate on the upward trajectory, which is resulting in the economics that we find so attractive.”
While Q1 2024 was a relatively benign catastrophe quarter for Everest at just $85 million of losses, Williamson stressed that cats are still elevated and this is contributing to the focus on discipline that the reinsurance market is pursuing.
“And then the other factor to keep an eye on, is we see some really strong increasing demand from some of our best clients. And given Everest’s position as a preferred and lead market, we have opportunities to deploy incremental capacity at really attractive rates. That’s happening both at the major renewals but also between those renewals. And there’s a lot more in that pipeline that I think will help to sustain the market,” said Williamson.
“And so, our perspective is as we roll into the rest of 2024, with the Florida renewal in June, and then the 7/1 renewal primarily driven by Australia, we expect discipline to be maintained, risk-adjusted economics should be terrific. And then I would further say that our expectation remains that that’ll continue into 2025,” he said.
