Tariffs for reinsurance of property risks will continue to grow in 2024
The Amwins Reinsurance Market State and Forecast to 2024 report shows that the reinsurance landscape is undergoing little change with notable rate growth in the property and casualty reinsurance sectors.
The report notes minor changes in conditions for the extension of optional reinsurance contracts, while rates for real estate reinsurance continue to rise.
However, there are signs that the market may soften underwriting and rates in certain risk classes and regions. The renewal of reinsurance contracts on July 1, 2023 was markedly less controversial, marked by a decrease in the number of private placements and an improvement in the consistency of terms of reinsurance coverage.
An influx of new reinsurance capacity from London and Bermuda is looking for new opportunities and yields at a time of low interest rates.
Optional reinsurance remains popular, with reinsurers offering capacity subject to compliance with underwriting parameters. Insurers’ own retention has increased, particularly among XoL and E&S programs, to manage natural catastrophe risks.
In the non-casualty sector, the report points to some upside from new entrants, although reinsurers have retreated somewhat from general liability due to earlier rate cuts.
Liability reinsurance rates remain low as new reinsurers seek more premiums and lower underwriting requirements.
Auto liability is experiencing an upward trend in rates: basic rates are increasing, especially for fleets and large commercial agricultural machinery.
“As insurers increasingly increase their retention in the face of adverse conditions, primary markets are expected to witness volatility in results in 2023 and 2024. This may require further capital infusion to weather the uncertainty,” Amwins analysts said.