June 1 renewals add 33% to property cat risk-adjusted rates: Howden Tiger

Risk-adjusted property catastrophe reinsurance pricing rose 33% on average at 1 June, within a typical range of 25% to 40%, analysts at global reinsurance broker  Howden Tiger have claimed in the market's first summary following the mid-year renewal deadline.

With the dust now settling, total risk-adjusted cat pricing reached a new high on the Howden Tiger index scales.

The balance of supply and demand may be “starting to shift” but the market on the whole remains “underpinned by enduring, lower levels” of capacity vis-a-vis demand.

“Although dedicated reinsurance capital has recovered somewhat since its low at the beginning of the year, challenges persist with historically high catastrophe losses, heightened geopolitical and financial risks and increased connectivity converging to create a climate of amplified risk aversion,” Howden Tiger’s head of industry and strategic advisory David Flandro said.

Pricing varied widely by layer and loss history, pushing individual cases well above the 40% upper end marker.

Higher layers also saw increases in excess of 40% year-on-year, notably affected by new minimum rate-on-line thresholds. This was the case for both earthquake and wind covers.

But much of the market must have seen it coming, and Howden Tiger cites early moves towards deals leading to an orderly finale, often amid oversubscription for higher layers. Lower layers remained “challenging” with a continuation of trends seen 1/1 for rising retentions.

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