RenRe sees progress in US casualty but warns more rate growth needed

US casualty is firming as cedants raise pricing and refine claims strategies, but around 15% rate growth may still be needed in 2025 to keep pace with loss cost trends, according to senior RenaissanceRe executives.

“In casualty, we have been encouraged to see that insurance companies are recognising increased trend in general liability and taking steps to improve their claims handling and realise greater underlying rate increases,” chief underwriting officer David Marra (pictured) told his company's first quarter earnings call.

Marra said he likes how cedants have handled the challenges to date around social inflation, from an initial move to slash limits through the early shift into high-speed claims handling as a means to fend of litigation. More recently, the savviest cedants are encouragingly starting to fight back.

Now may be “the right time to be fighting the plaintiff's bar”, but positive results from that endeavour can emerge only slowly, he said.  

Cumulative rate gain over that multi-year process remains only neck and neck with cumulative loss cost trend.

“For profitability to improve, rates need to continue increasing at 15% or greater throughout 2025,” Marra said, contrasting to loss-cost trend in a 10-12% range. “We are pleased with the progress and confident that general liability is on track for improved profitability.”

“In the meantime, we are taking a cautious approach,” Marra said. “We will continue to reduce exposure to general liability.” 

Professional liability may be due for some relief after a sharp softening. “Primary capacity is starting to withdraw from the market,” Marra said of the latest signals. But it remains “too soon to tell if this will drive discipline in the class”. 

Specialty lines have seen “increased competition” and a spate of large loss jabs in Q1, including the American airlines crash and two refinery fires, but RenaissanceRe’s appetite has not diminished. “While there has been some increased competition, we aim to hold our existing lines, deploy capacity on the best programmes, and optimise our portfolio across profitable classes,” Marra said. 

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