While the outlook for property and casualty (P&C) pricing remains favourable for 2024, Eric Andersen, President of re/insurance broker Aon, expects a transition to a more product and risk specific marketplace over the next 12-24 months.
Following the release of a solid set of results for 2023, Aon executives held an earnings call to discuss the firm’s performance and answer questions from analysts.
As insurer, reinsurer, and broker Q4 and full year 2023 financial results continue to be released, it’s evident that the 1.1 2024 reinsurance renewals was more orderly than last year with a more balanced supply demand dynamic. Rates, notably in the property catastrophe space, but also in many other areas, continued to rise at 1.1 2024, albeit less so than a year ago.
Market consensus suggests that the P&C pricing environment will remain favourable in 2024, with some analysts forecasting a peak in the cycle later this year.
“I would say that we’re probably heading towards a market where it’s more of a series of markets, where you see price competitiveness in certain areas, where new capital has drawn in,” said Andersen during today’s call when questioned on the P&C pricing outlook.
He highlighted D&O as one segment that has been called out, but also noted ongoing challenges in certain parts of property, as well as growing concerns about the casualty market amid social inflation trends.
“So, I think rather than just a rising market for all, what we’re going to see over 24 and 25, it is going to be very product specific and very risk specific,” continued Andersen.
This, he added, is something that plays well to Aon because it allows the broker to utilise its teams and analytics to be able to help clients think through how they either want to trade or manage the risk.
“But I think that’s where we see the market going in 24, 25,” said Andersen.
