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The broker said softening was emerging in some lines, but cat risks remain challenging. -
Falling rates in finpro and increased competition in property drove the trend.
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The ratings agency also affirmed the reinsurer’s A- FSR rating.
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Property rate increases decelerated to 6% in Q4, compared to slowdowns of 7% in Q3 and 10% in Q2 2023.
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Sources said that the market was not sufficiently profitable to concede ground on pricing.
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The flight of reinsurers to mid- and upper layers of programmes is influenced by recent experience but softening at this level can be seen as a risky move.
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European rates on line increased by 7.60%, while in the US prices were up 5.25%.
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The broker’s report also hailed the best risk-adjusted margins for ILS investors in a decade.
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The broker said over-placement on some deals was a positive sign for brokers, though reinsurance capacity is still very tight in some areas.
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Reinsurers are making some adjustments to secure target signings but appetite to grow is finely balanced.
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Sources said that there was still rating adequacy in the market, but that further pricing falls would be unsustainable.
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Anticipations of a tug-of-war around a ‘flat to slightly up’ pricing renewal have indeed come to fruition.
