Gallagher Re: more double digit rate gain mid-year, less drive for T&C

Reinsurers drew another round of hefty double-digit rate gain from mid-year US property renewals but, with a long haul ahead to the next major renewal, packed enough capacity into the renewals to smooth some of the market’s rougher edges.

“Since the April report, the market initially stabilised and then shortly before June 1 began to give ground on some of the harsher terms and conditions requests,” global reinsurance broker Gallagher Re said of the mid-year renewals.

Property reinsurance rates for the broader US rose 20-40% for loss free accounts and 35-75% for loss-affected, Gallagher Re reported. Catastrophe treaty rate rose 10-35% for loss-free accounts and 30-50% for loss-affected.

Amid those rate gains and with a long gap to the next major renewal, “capacity became more readily available” including increased limits and new lines as reinsurers faced “effectively their final opportunity to make their business plan projections” for 2023.

That took the edge off of the drive for tighter terms, Gallagher Re authors indicated. “Restrictions in coverage which had been seen on the first quarter renewals were removed from outstanding Q2 authorisation,” authors claimed, citing even “many cases” in which all risks coverage was resumed.

Even the often-strained Florida market received “sufficient supply of capacity to clear renewals, albeit at meaningful price increases,” Gallagher Re claimed, citing rate on loss hit cat accounts up 30-40%.

“Property catastrophe rate on line indexes appear to be at record high levels and general sentiment is that current pricing levels are more than adequate,” authors claimed of Florida renewals.

Elsewhere, rate gain in the UK was generally milder than in the US, at 10-20% for loss free and 20% for loss-affected, levels that rose to 27.5-35% and 32.5-37.5% for cat treaty.

Mark Australian property at a 15 to 25% rate gain for loss-free and 40-60% for loss-affected, figures that rose modestly to 20-30% for loss-free and 40-75% for loss-affected in cat treaty. Upward pressure on retentions remained “significant.” Quotes were said to vary quite widely, pointing to differing views to rate adequacy.

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