Renewals

EMEA CEO Laurent Rousseau said reinsurance must retain its relevance to investors.

The reinsurer stressed it “did not shy” from cat business in 2023.

The new Verisk SCS model is increasing expected losses on aggregate bonds.

Reinsurer executives during a Aon reinsurer panel stressed that the industry worked hard on setting the right structure.

The market has learned lessons from earlier soft market phases that it will apply now.

Terms are expected to hold, underpinning the stronger recent performance of reinsurers.

The volume of property cat aggregates placed grew 50% in 2025.

The trend for private credit in alternative asset management is “set to continue”.

The ratings agency warned negative PYD on US casualty will likely continue.

The agency noted inflows to cat bond funds and investor interest in private ILS.

Dedicated reinsurance capital is on track to increase by 8% in 2025, the broker said.

In the US, the index fell 6.7% year on year.

The Cayman Islands-domiciled SPI now has four institutional backers.

Property cat-focused sidecar capital was up by approximately 10% in H1.

The company said the reduction was due to years of steady improvements.

The programme’s total limit this year is down $594mn to $1.36bn.

The sidecars will provide capacity for reinsurers and large insurance carriers.

The new unit – Ceded Re – will operate under the leadership of Guy Van Hecke.

Buyers have turned to retro markets for covers where ILW pricing is less attractive.

HCI secured three towers with $3.5bn in XoL coverage.

The total cost excluding a 15% quota share was $201.85mn, with rates down 12.2% from last year.

The Floridian also secured $352mn of multi-year coverage extending to 2027.

Property cat XoL rates were off by around 10% on average on a blended risk-adjusted basis.

The ILS market has won market share at the top of programmes as buying expands.

The cat bond limit total is an uplift of around 60% on the carrier’s 2024 bonds.

As with 2024, pricing pressure has been most acute on top layers.

The total cost for the program increased 1.8% from last year’s.

Its 2025 programme exhausts at $9.5bn excess $1bn.

Fully placed, this would equate to $275mn on the per-occurrence tower and $675mn on agg.

The ILS segment is not ready to gloss over loss-heavy years in renewal discussions.

The mega cat bond season in Q2 last year recorded issuance of $8.2bn.

Island appetite remains stable, but early 2025 loss activity has injected fresh uncertainty.

Some $4.8bn of reinsurance and cat bond limit will come up for renewal in 2025.

The programme structure was expanded, but it is unclear what percentage was placed.

The terrorism pool has shifted its programme from facultative to an XoL arrangement.

The carrier increased premium by 7% at the January renewals.

The state-backed carrier has $2.1bn of Alamo Re cat bond coverage.

The firm ceded $417mn of premiums to the sidecar in 2024.

Several Florida start-ups are poised to begin writing business this year.

Modest increases to reinsurance costs were partly offset by the Australia cyclone pool.

The LA fires ‘demonstrate the magnitude of tail events not well captured in modelling’.

EGPI growth at the carrier’s Alternative Solutions unit jumped 29.6%.

Non-proportional business accounted for 34% of its total.

The reinsurance attaches at $7bn, unchanged for the past two years.

The carrier said reinsurance was a key component of its “low-volatility strategy”.

Cat bonds were a key supply-side driver at 1 January 2025.

Investment in the space comes mainly from the cat bond market, Gallagher Re said.

The broker anticipates strengthening investor demand for collateralised re.

Over-subscriptions have been evident on well-priced US cat treaties.

Increased reinsurance capacity was more than sufficient to meet continued growth in global demand.

The broker estimated ILS capital has reached $107bn.

Overall, reinsurers accepted that rate cuts were still leaving them with strong margins.

The firm said it benefited from favourable retro market conditions.

Former ILS investors who left the space have looked again and re-allocated.

The association’s Hurricane Beryl net loss stood at $455mn as of 30 September.

The reinsurer is planning to drop its cession rate from 40% to 30%-35%.

Many in the ILS sector are bullish on Milton losses falling at the lower end of earnings impacts.

Post-Milton investor interest in ILS has yet to translate into dollars allocated.

Brokers expect strong competition at remote risk layers at the 1 January renewal.

The broker said it expects strong ILS capital inflows to continue.

Quick-moving cat risk trading may become more prevalent in the ILS market.

Aeolus increased its participation on the program more than fourfold.

More than $1bn has entered the sidecar segment in 2024.

The broker estimated ILS capacity reached a record $107bn as cat bond interest surged.

The broker said high ILS maturities would boost cat bond issuance though the hurricane season would impact capital availability.

The broker said the mid-year reinsurance renewals benefitted from “more than ample” capacity.

The ILS manager targeted aggregate and second-event covers.

Excess capacity rebounded in June 2023 after hitting a decade-low just 12 months earlier.

The company increased its full year 2024 adjusted net income guidance.

Top layer competition is an added pressure on ILS firms, but the impact can be overstated.

Twia needed to purchase $3.35bn of reinsurance to satisfy its $6.5bn 1-in-100 PML.

The expected spend is around 33% higher than Twia had budgeted.

The suggested update to the PML is $2bn higher than last year.

The carrier also set out detail on its alternative solutions offering. 

European rates on line increased by 7.60%, while in the US prices were up 5.25%.

The $7bn initial attachment point has remained unchanged from last year.

Of $17bn that entered the market in the 15 months to 31 December, 40% was channelled into ILS vehicles.

CFO William McDonnell said reinsurance market stabilisation in 2023 allowed the firm to buy more protection than expected.

The broker’s report also hailed the best risk-adjusted margins for ILS investors in a decade.

Competition for remote risk deals intensified as more capital has targeted the swathe of business that has historically been the heartland of ILS.

The broker’s 1st View report predicted that cat bond issuance should remain elevated until at least Q2 2024.

Reinsurers are making some adjustments to secure target signings but appetite to grow is finely balanced.

Projected 2024 ILS returns remain historically high, but signs of increased appetite for top-layer cat risk and top-end retro raise questions over how long this will last.

The TWIA board has fired the starting gun on the process to place its reinsurance programme incepting June 2024.

The P&C Re CEO discussed Swiss Re’s P&C appetite and nat cat exposure in the investor presentation.

The ILS sector grew in the context of 0% interest rates historically.

Demand is expected to boost the ILS market growth.

ILS capacity in the form of retained earnings and new inflows is shaping up to meet growing demand for reinsurance and retro coverage.

The supply-demand dynamics are all pointing in ILS markets’ favour, so long as hurricane season goes quietly.

Total reinsurance capital will climb to $560bn, ahead of last year but behind the 2021 peak of $570bn.

The firm’s 1st View report on the July renewals also flagged that an oversupply of ILW capacity may bring down attachment points relative to early 2023.

The broker estimated global reinsurance capital rose by $30bn over the first quarter, with a 7% uplift in alternative capital and a 5% recovery to traditional equity.

The organisation bought $1.4bn of reinsurance at 1 April.

This year’s program – sealed with a panel of 78 reinsurers – includes $875mn of multi-year ILS capacity providing diversifying collateralized reinsurance capital.

Shifts in reinsurance appetite across the risk spectrum has squeezed out ILS providers in some cases.

The pace of rate hikes will ease back from the 1 January reset as buyers seek to lock up capacity early after last year’s dislocated renewal.

Aon expects depleted shareholder equity to be restored over time via higher retained earnings and the ‘pull-to-par’ effect of bonds approaching maturity.

Cat bond pricing has fallen by about 12% since year-end but margins are still strong enough that the market could be set for meaningful growth, the broker forecast.

The real test for cat capacity will come at the mid-year point, according to Gallagher Re.

The cat bond market is thought likely to receive an outsized portion of any capital inflows.

CEO Locke Burt said Florida reforms would be “transformational” and that investors had become more receptive to cat risk owing to higher rates.

The US mutual cut back its 1.1 reinsurance program, according to sources.

The ILS manager’s analysis highlighted that Lloyd’s nat cat exposure had lowered over the six years to 2021.

The carrier has upped its global all-perils cat coverage to $1.2bn since January last year.

The capital management platform remains active but January renewals were fronted by the balance sheet.

The reinsurer noted “buoyant” conditions in the cat bond and private reinsurance segments.

The carrier has increased its retro capacity by 56% to EUR1.34bn.

The carrier said it achieved average risk-adjusted price increases of 30% on cat business.

The headline market drop in AuM belies a more lively growth story for funds operating outside of the ILS major league.

The organisation is preparing its reinsurance placement based on the increased exposure numbers.

Rate increases achieved at 1 January will help carriers keep pace with inflation, the agency said.

The carrier has renewed two of its quota shares with continental reinsurers with final negotiations underway.

Key themes of the renewal that resonated across the ILS investor base include the elevation of attachment points, though lack of take-up of named perils coverage may disappoint some.

The broker said the renewal had been “gruelling” for cedants.

The European cat market is hardening faster than expected but the process is being delayed by ongoing negotiations over retro protection and varying lists of reinsurer demands to improve terms.

The syndicate’s growth headroom is somewhat constrained compared to the Lloyd’s market average.

High-yielding alternatives are taking away attention from this sector, with its complex narrative around recent losses, and diversification only goes so far in selling its story.

Expansion is set to be a trend across Lloyd’s as syndicates look to capitalise on a hardening market.

The ILS broking leader was speaking at the first in-person Munich Re ILS roundtable at the Monte Carlo Rendez-Vous since the pandemic.

The price for risk carrying is no longer insufficient, Munich Re's CEO said in a Monte Carlo briefing.

Moody’s, S&P and Fitch all see current conditions as potentially allowing for ILS growth.

Succeeding years of nat-cat losses have left aggregate and lower-layer capacity tighter.

The deadline for Lighthouse Excalibur policy cancellations has been extended to 30 June.

Reinsurers secured concessions on terms and hiked rates as most insurers managed to patch together cover to enter hurricane season.

DE Shaw has been offering a form of “capacity wrap” to insurers in which its limit could be used to plug gaps throughout programmes, sources said.

The chunky deal comes as many reinsurers are heavily cutting their Florida cat books.

With reinsurance availability scarce and costs rising, several carriers have called an interim halt to new homeowners’ business.

Some cedants remain far behind in a stressed renewal, but others are on the path to completion in a reshaped Florida market.

Proposed RAP coverage layer adds protection and exposures for insurers.

Several firm-orders have been released, but there are widespread expectations of a much-delayed renewal as low-layer capacity remains elusive.

The Gallagher Re managing director of EMEA North and East said buyers need to be able to explain their stance on handling inflation, going beyond price to include action on their own underlying limits and deductibles, to get reinsurers on board.

The $500mn of new demand from Allstate highlights carrier need for cover after Ida, but pulling together cat capacity in the peak US market remains a tougher ask.

Wind XoL rate increases are tapering off, while cedants push for commission increases on quake quota-shares.

Scor said it had purchased the same retro limit as it had last year while managing “contained” price increases, as it cut back its catastrophe exposures.

RenaissanceRe had raised $470mn for the high-risk fund platform a year earlier.

The industry is expected to improve its return on capital slightly in 2022.

The French reinsurer’s vehicle has renewed for the fourth consecutive year.

The Federal Emergency Management Agency trimmed its spend on the program by 12%.

Many private deals featured in final renewals negotiations as overall cat risk appetite was cut back, with some ILS segments hard-hit.

As the renewal is expected to spill over into 2022, the two-speed market will put pressure on retro-reliant carriers.

The shortage of sidecar capacity could have a knock-on impact to broader renewals.

This year, instead of talk about running late, people were highlighting how the starting gun has barely been fired.

The retro renewals are barely underway, as a challenging fundraising environment and queries over loss experience has delayed the typical pace of progress.

Its reinsurance premiums ceded are expected to reach $207mn, up from $175mn a year earlier.

The retention was $80mn which will reduce to $55mn for second and third events.

Willis Re international chairman James Vickers said that the ILS market played a strong role in the Florida renewals, but it was becoming more difficult to judge the overall impact of the sector as more capacity stays behind rated balance sheets.

The broker said a buoyant ILS market contributed to the reinsurance market nearing a new equilibrium at the end of mid-year renewals.

The news marks the second year in a row members have ceded more than $1bn in risk to the Caribbean Catastrophe Risk Insurance Facility.

Total spending was up 2% as the Floridian carrier cut back the limit it bought by 10%.

The organisation has $170mn less cover in place than the $2.1bn it had for the 2020 and 2019 hurricane seasons.

Last year it secured just NZ$6.2bn of protection from major nat cat events, as premium spending went up by 11%.

The Florida reinsurance renewals ran more smoothly, with lower overall rate increases than initially expected.

New and growing carriers helped to fill out treaties as Sompo stepped back from a market that came in flatter than expected for remote risk.

The carrier cut back its treaty limit by around 13% and lowered its deductible.

Divergence between appetite for upper and lower layer reinsurance risk may drive some panel turnover, and disadvantage some segments.

Berkshire, along with some other expansive reinsurers, grew its level of assumed reinsurance premium from top Florida insurers significantly in 2020, as the ILS market share dropped overall.

The company also procured approximately $180mn of incremental limit for earthquakes.

Pockets of the distressed Florida market are still expected to face a challenging renewal, but much of the remediation was carried out last year.

Reinsurers are still hoping to achieve double-digit rate increases, but brokers and cedants suggest this is unlikely against the context of strong reinsurance supply.

Amid an April renewal that resulted in a slower pace of typhoon rate increases, ILS deals covering Japan have held up above historic lows.

Reinsurance underwriters and brokers anticipate a Japanese renewal largely unaffected by Covid-19 as negotiations continue to focus on payback for 2018 and 2019 typhoon losses.

The personal and commercial lines book will be folded into recently-acquired Centauri Insurance.

Event definitions were also tightened at renewals, the broker said.

The carrier predicts Covid’s reinsurance impact will drive market hardening.

The French reinsurer reported average treaty price increases of 7.8% in January and predicted rate growth through to 2022.

One estimate suggested around $2bn of new capacity in private deals.

The reinsurer was chasing a high 15% net return target but said lower demand and capital trapping made this unachievable

The carrier maintains its 2021 profit forecast amid 8.5% 1 January premium growth.

But analysts added that slowing rate momentum suggested the hard market could end this year.

The flood insurer cut just under $200mn of limit from its renewal, enabling it to pare back its outlay, although nominal programme-wide rates rose 13%.

Limited new inflows supported the collateralised and sidecar markets as cat bond offerings attracted significant capital.

Aggregate retro capacity has “reduced enormously” but rate increases were less severe than some had feared, the Willis Re international chairman said.

Capacity was constrained but some ILS funds were able to grow, while cat bonds also propped up supply.

New capacity and fewer problems with trapping contributed to a smoother renewal than some had expected.

US cat renewals are outpacing European increases, but as signalled earlier this month, the level of rate hikes has fallen back.

Costs outpaced the European benchmark rate change, but Covid loss negotiations have been deferred.

Cedants and reinsurers perform a "slow dance" around pandemic losses, with claims negotiations deferred beyond renewal.

A fresh BI ruling in Australia this week highlighted the industry's reason for caution over Covid exposure as legal actions continue.

The carrier says higher retro renewal costs will act as a counterweight to rising rates.

The reinsurers point to falling interest rates and loss experience as the basis for further hardening.