Demand gap in treaty will serve equilibrium as reinsurers remain disciplined

Reinsurers need to hold the line on both rates and retentions, says Beazley.

A demand gap has emerged in US treaty business, which will be solved only incrementally as buyers seek to reestablish an equilibrium in their reinsurance programmes without the luxury of any meaningful levels of new capacity entering the market—and reinsurers holding the line on both rates and retentions.

That is the view of Mark Vaughan, deputy group head of treaty with responsibility for writing the US & International treaty account from London at Beazley, speaking to APCIA Today.

He calculates that inflation created a demand gap of some 15 percent going into the year-end 2023 renewal, yet only 4 to 5 percent of additional limit was bought. In 2023, inflation has added another 5 percent again, leaving even more demand, again unfulfilled.

A sneak preview: more exclusive content and interviews inside

Hard market should last at least another year

Reinsurers need to deliver double-digit returns even when a Hurricane Ian-sized catastrophe strikes: IQUW.

2023 will be the year of the retained loss

2023 has seen 31 insured losses globally of more than $1 billion—yet there has been none higher than $7 billion: Aon.

A sneak preview: more exclusive content and interviews inside

Unfinished business in property; casualty needs attention

Hannover Re will be seeking incremental improvements to its North American book.

Hannover Re heads towards the 1/1 renewals with an eye on sweeping up bits of unfinished business in US property while digging deeper into issues in the increasingly concerning casualty segment, Axel Freiboth, Hannover Re’s managing director & chief underwriting officer for treaty reinsurance in North America, told APCIA Today.

Neither of those things should mean significant change for the German reinsurer, however. Its approach is more subtle and nuanced—seeking incremental improvements as opposed to major changes in the Hannover Re North American book.