However, there was a range of pricing outcomes that varied by region, attachment point and reinsurer views of price adequacy, the company said in its press release on December 30, 2024.
Property catastrophe renewals were consistently oversubscribed as reinsurer appetite increased by 10% to 15%, while Guy Carpenter estimates demand only increased by approximately 5%.
“It is critical that reinsurers take a long-term view and are constructive partners for our clients,” said Dean Klisura, President & CEO of Guy Carpenter. “Renewal outcomes at year-end reflect reinsurers’ positive property experience over the last two years and casualty portfolios that are well-positioned for future profitability”, CEO added.
According to the press release, attachment points have significantly affected reinsurer results. In 2024, global industry catastrophe losses reached nearly USD 130 billion, with the estimated reinsured share of these losses falling to 14%, down from the pre-2023 average of 20%. Given the increased catastrophe attachment points of recent renewals, supplemental purchases, such as frequency protection and other retention buydown options, play an important role in bringing balance to the market and ensuring reinsurance is impactful on cedent capital and volatility management.
In contrast to the broader property catastrophe market, loss-impacted layers saw adequate capacity with risk-adjusted rates from flat to 30% increases in regions such as the US, Europe and Canada.
Activity in the 144A catastrophe bond market remained robust at year end, with 67 different catastrophe bonds brought to the market for approximately USD 17 billion in limit placed in 2024.
Although casualty reinsurance programs were an area of market concern, year-end renewals were completed with varying outcomes. Proportional casualty structures generally experienced ceding commissions that were flat to slightly down. However, excess of loss general liability and excess/umbrella placements continued to face pressure on treaty terms. Like with property catastrophe programs, cedents considered the value of casualty reinsurance by weighing cost and structure options.
Clients provided additional claims, rate, and exposure data. This increased transparency helped distinguish client portfolios and allowed reinsurers to gain comfort with treaty terms.
The cyber reinsurance market remained dynamic and innovative, with buyers exploring a range of blended solutions, from pro rata to event excess of loss and aggregate stop loss structures.
Overall, cedants continue to manage reinsurer partnerships holistically – trading across product lines and treaties. This is critical in the current environment where market conditions vary across property and casualty lines, Guy Carpenter said.
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