Property cat reinsurance pricing to remain firm at 1/1: Guy Carpenter CEO Klisura

Property catastrophe reinsurance renewals at January 1st 2024 are anticipated to see continued firm pricing conditions, with reinsurers looking to hold the line on terms and attachment points, according to Guy Carpenter President and CEO Dean Klisura.

Speaking during the Marsh McLennan third-quarter earnings call today, Klisura explained that the property catastrophe reinsurance market will still be among the most challenged at the next renewals.

“We expect challenging market conditions to persist for property cat at the upcoming January 1 renewal, driven by inflation,” Klisura said.

Adding that, “As you’re reading about, cat losses continue to be very elevated, with many attritional losses, many billion dollar plus events this year, political instability continues.”

Continuing to say, “We do expect pricing to remain firm, in property cat. It’ll vary region by region, it won’t be what we saw last year, as an example in the US and Europe, but we do think that firmness will be there.”

At the same time, Guy Carpenter anticipates some more demand for reinsurance as well and Klisura implied this could be at levels where the ILS market could benefit.

He said, “We do expect additional capacity and an increased appetite from reinsurers to write more business, particularly at higher attaching property cat layers.”

Going on to say that, for the January reinsurance renewals, “The key is, we expect reinsurers to continue to exhibit that discipline on attachment points, pricing and terms and I don’t see anything going backwards.”

“We think property cat capacity in the market will remain adequate, we think it’ll be a more manageable renewal for our clients without that significant supply-demand imbalance and dislocation that we saw last year and we do expect increased demand from our clients, to buy more reinsurance, and particularly in key regions like Europe,” Klisura said.