According to the latest Gallagher Re 1st View, detailing the 1 January 2023 renewal season, the market faced a very late, complex, and in many cases frustrating, 1 January renewals.
According to ICMIF Supporting Member Gallagher Re, two areas stood out as the most challenging: peak-zone US property catastrophe capacity and coverage for strikes, riots and civil commotion, and war. In most other lines and regions, the report says, buyers were able to source capacity, though at a higher cost and, in many cases, with changed structures.
Times of significant market change are always challenging to navigate, says Gallagher Re, but there has been a significant difference in how individual reinsurers have reacted despite a widespread stated ambition to grow premium volumes in what is being viewed as the best treaty underwriting terms and conditions for a generation.
Key findings of the report
- The two areas of most constraint were peak-zone US property catastrophe capacity and coverage for Strikes, Riots & Civil Commotion and War. In most other lines and regions, buyers have largely been able to source capacity, albeit at a higher cost
- A divergence between reinsurers prepared to provide clear lead terms and capacity and others who waited for firm orders in an effort to adjust terms at the last minute
- Clients with broad trading relationships facilitated negotiations with some reinsurers to be ‘packaged’, helping generate preferred pricing and/or increased capacity
- European property renewals generally being completed earlier than those for US clients albeit much later than the previous norm, in some instances by as much as a month or two
- Casualty treaty market viewed as calmer and more rational than other parts of the business, and with renewals completed at terms seen as tough but fair by most buyers
- Improvements in pricing and conditions particularly for property cat-related lines led to some new capacity coming into the market
- ILS and collateralized markets have seen little signs of new capital entering but lower estimates from certain clients on Hurricane Ian losses eased trapped capital concerns and helped to provide much needed additional liquidity for retrocession buyers
Download the full report here. The thrice yearly 1st View publication delivers insights from Gallagher Re on current market conditions within the reinsurance industry, covering the changes in pricing levels and conditions experienced by Gallagher Re brokers and product specialists.