The Jan. 1 reinsurance renewals stabilized after last year’s exceptionally challenging market, thanks to more favorable supply dynamics, according to several brokerage firms.
Jan. 1 is the most important date on the reinsurance calendar, as roughly half of the world’s reinsurance renews.
Why it matters: Consumer-facing insurance companies have seen dramatic premium hikes from their insurers, known as reinsurers, over the past few years. Those premium hikes appear in the property and casualty policies consumers buy.
While insurance buyers should expect to see rising premiums and stricter coverage terms, the price pressures for some coverage areas may ease in 2024.
By the numbers: Reinsurance broker Guy Carpenter cited a pricing range of flat to single-digit increases for non-loss impacted programs. In contrast, programs with losses saw 10% to 30% price hikes.
Meanwhile, Howden Group, a multinational broking firm, reported sufficient supply among casualty reinsurance renewals. “Outlier outcomes were driven by individual account performance rather than overriding market sentiment,” the firm wrote about Jan. 1 renewals.
What they’re saying: “The reinsurance market has stabilised after last year’s exceptionally challenging renewal. Reinsurers were relatively unscathed by large losses in 2023, due in part to more favourable terms and conditions, including higher risk retentions and attachment points,” Tim Ronda, CEO of Howden Tiger, said in a statement.
“2024 looks to have provided a welcome return to more stability and predictability … More relevant are the signs of over-placement on well-structured programs, indicating an improving position for some buyers going into 2024,” Tom Wakefield, CEO of Gallagher Re, wrote.
What we’re watching: The macroeconomic backdrop is a critical factor shaping the insurance market. Increasing claims costs due to higher prices from inflation have driven carrier losses over the past couple of years. The hard insurance market cycle continues, but some insurance lines may see more relief from ongoing premium hikes.
Chivaroli and Associates Insurance Services is a full-service brokerage firm specializing in the custom-design and placement of insurance and alternative risk funding solutions for your healthcare organization.