January 1 got done in property cat, albeit at a price: Gallagher Re

January 1 renewals proved "very late, complex and in many cases frustrating" chiefly as reinsurers and cedants slugged it out over terms and pricing in property cat, with some rates more than doubling, retentions rising, but all-peril coverage largely surviving the process,  Gallagher Re said in its early view to 1.1.

European property provided a "very tense" renewal that may have "damaged client relationships and reduced confidence from some buyers in the reinsurance product." Cedants blame tactical delays by some, incapacity delays by others.

When the dust settled - and it chiefly has with capacity rising to meet inflation-stoked demand - prices were higher and select, but not all, structures altered.

Most cat firm order terms were up by a risk-adjusted mid-20% to low-40% for loss-free key perils and "significantly higher" even up to 100% for loss affected and aggregate. Germany Switzerland and Austria led the hardening ahead of milder gains in France, Belgium, Netherlands and elsewhere.

What is more, a certain "inflexibility" amongst reinsurers had "forced" attachment points on an event basis closer towards the 1 in 10 years for key perils, occasionally slightly lower for combined perils. layers were sometimes achieved.

But reinsurers appear to have fallen short of goal on demand that the market move en masse towards named perils, a demand that had created a "significant road block" in the early process leading to notable delays, Gallagher Re claimed.

In the US, risk-adjusted cat pricing was said to be up 25 to 50% in loss-free accounts and 45 to 100% for loss-bearing accounts. Non-cat accounts with loss histories could see gains spanning 35 to an eye-opening 150%, the Gallagher Re data spread showed.

Low layer XoL and cat programmes were called "particularly challenging" and cedants responded with higher retentions or other forms of co-participation. Aversion to lower levels didn't make pricing much easier at the top, Gallagher Re claimed.

Across the process, reinsurers may have lost some favour, wasting no small amount of cedent time and effort, some complain. The initial advice to prepare early with a good story on inflation ran head on into a period of suspended pricing efforts followed by a more-rate-for any-reason race to year-end.

Select unspecified reinsurers may have gained in cedent esteem for a "firm and transparent approach" signalled early and with stable views to pricing adequacy, Gallagher Re said.

"We have seen a significant difference how individual reinsurers have reacted despite a widespread stated ambition to grow premium volumes," Gallagher Re analysts wrote. "Some have reached the end of the renewal season with reputations enhanced, and frankly, deservedly so."

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