Property-catastrophe reinsurance pricing saw continued moderation at the June 1 renewals with a selective return o
f capacity following historic pricing strength, according to Howden Re, the reinsurance and advisory arm of Howden.
While rate moderation continued and reinsurers’ appetite expanded
moderately, “underwriting rigor persisted, especially in structurally challenged layers,” said Howden Re’s June 1 renewal report.
Risk-adjusted rate-on-line changes ranged from flat to down 20%, d
epending on loss experience and attachment point, the report said, noting that, despite pricing pressures, programs gen
erally attracted subscriptions above 100%.
Renewals in Florida were marked by increased appetite from tradi
tional reinsurers, which appeared confident in litigation reforms and viewed pricing as attractive after years of caution, the report indicated.
Figure 1: Risk-adjusted property-catastrophe reinsurance rate-on-line index at June 1. Source: Howden Re
Property-Catastrophe XoL
In the property-catastrophe excess-of-loss (XoL) reinsurance market, ca
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pital inflows have rebounded, with newly formed reinsurers and synd
cates deploying meaningful capacity into mid-year placements, the report confirmed.
“As such, expanding supply continues to outpace rising demand, underpinned by improved reinsurer retained ear
nings and sustained catastrophe bond activity, including the issuance of new and upsized transactions at the upper layers of reinsurance programs,” Howden Re continued.
As a result, the broker said, remote-attaching cat-XoL layers have experienced rate reductions in the range of 10% to 20%.