Gallagher Re’s 1st View on Reinsurance Market

Source: Gallagher Re | Published on January 4, 2023

January 1 reinsurance renewals

Issued three times a year, Gallagher Re delivers the very first view on current market conditions within the reinsurance industry at the key renewal seasons: January 1, April 1, and July 1.

Key Findings for the Reinsurance Market:

  • The two areas of most constraint were peak-zone US property catastrophe capacity and coverage for Strikes, Riots & Civil Commotion and War. In most other lines and regions, buyers have largely been able to source capacity, albeit at a higher cost
  • A divergence between reinsurers prepared to provide clear lead terms and capacity and others who waited for firm orders in an effort to adjust terms at the last minute
  • Clients with broad trading relationships facilitated negotiations with some reinsurers to be ‘packaged’, helping generate preferred pricing and/or increased capacity
  • European property renewals generally being completed earlier than those for US clients albeit much later than the previous norm, in some instances by as much as a month or two
  • Casualty treaty market viewed as calmer and more rational than other parts of the business, and with renewals completed at terms seen as tough but fair by most buyers
  • Improvements in pricing and conditions particularly for property cat-related lines led to some new capacity coming into the market
  • ILS and collateralized markets have seen little signs of new capital entering but lower estimates from certain clients on Hurricane Ian losses eased trapped capital concerns and helped to provide much needed additional liquidity for retrocession buyers