“There’s a lot of discussions to be had between now and Jan 1, and then during the course of 2024, to figure out what reasonable price levels and attachment points might be for the industry,” says John Dacey, Group Chief Financial Officer at Swiss Re.
In response to a question on how he thinks supply/demand will play out next year, Dacey highlighted the frequency of severe weather events this year, which included an “enormous number” of secondary peril events that “typically have been left on the P&L of the primary companies.”
“There may be some reinsurance recoveries, but not many. This is not a light nat cat year. The preliminary estimate from the Swiss Re Institute has it at least $80 billion at nine months, on for another $100 billion-plus full year,” Swiss Re’s CFO explained.
Dacey reiterated there’s been a larger burden carried by the primary industry given the change in attachment points of reinsurers in the renewals to date.
He continued, “We do expect a very strong demand from the primary market. It’s not clear that we’re going to be able to meet in the layers that they might be most interested in getting covered.”
Dacey concluded, “What I can say is to date, we seem to see a good discipline by the providers of reinsurance to make sure that the economics continue to be adequate for what we’re booking, and we’ll be able to say more in the coming months.”
