July 1 renewals ‘more orderly’ for reinsurers, says Gallagher Re
Reinsurers had a more orderly July 1 renewal season compared to June and January, while more capital came into the market, according to Gallagher Re.
The reinsurance broker said: “While significant increases on a year-on-year basis were seen, the market was orderly and rational with adequate capacity from the reinsurance market available to support client needs. This resulted in a less-stressed renewal process in most cases.”
Gallagher said new capital entering the market (both traditional and ILS) coupled with moderated demand, through increased retentions and limited purchases of additional limit and clearer expectation management by all parties, have led to a more orderly renewal.
It said the casualty treaty market remained straightforward, with adequate capacity and flat to moderate rate increases, driven primarily by reinsurer comfort with improvements to underlying portfolios.
The Gallagher Re statement said strong returns achieved by ILS funds in 2023 to date led to growing investor interest, and in turn an increase in the overall number of bonds being issued, while bonds were issued in cyber and casualty as well as traditional property perils.
Gallagher noted that there were limited signs of completely new reinsurance entities forming. “The trend is one of consolidation into fewer, larger reinsurance entities – which, in the absence of any major losses, points towards pricing stability.”
Tom Wakefield (pictured), global chief executive officer of Gallagher Re, said: “With the improved terms and conditions available in the reinsurance market, some existing reinsurers are leaning into the hardening market, committing more of their existing capital, as well as any new capital they are raising, to reinsurance.
“However, in contrast to other historic hard markets, there are limited signs of completely new reinsurance entities forming and the current trend is one of consolidation into fewer, larger reinsurance entities – which, in the absence of any major losses, points towards pricing stability.”
