Renewals

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.

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 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.

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.

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