Insurers won’t rebuild reinsurance as market calms in ’24, survey says
European insurers are unlikely to increase their reinsurance protection in 2024 despite the taming of the hard market and comparative stability of prices, a survey of European insurance industry leaders has indicated.
“European P&C insurers will therefore remain susceptible to medium-sized weather events, or an accumulation of smaller more frequent events,” analysts at the Moody's ratings agency said of the results of their survey of insurance chief financial officers around the industry.
Tepid price gains at the January 1 and April 1 insurance renewals could have had the power to tempt primary carriers to recover some reinsurance protections lost during the 2023 market reset.
“Even so, just 10% of CFOs expect to increase their reinsurance protection in 2024,” Moody's analysts said of survey results.
Around 80% expect no change in their reinsurance coverage, while another 10% plan to retain more risk.
About 40% of CFOs say that the to-date reduction in reinsurance and increase in reinsurance cost may very well negatively affect profitability in 2024.
The higher reinsurance retentions taken during the 2023 reinsurance market reset has likely increased natural catastrophe risk by some 10% on average for small to medium sized catastrophe events, Moody’s analysts claimed.
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