Retro clears at 1/7 as buyers adjust needs, sellers take higher layers

Retrocession markets finally calmed down for the mid-year renewals, ensuring a “more orderly” and “more timely” market than the dislocated conditions suffered at 1/1, analysts at  Gallagher Re said of the 1/7 season.

Pricing remained “broadly in line” with January 1 levels, with underwriters said to have remained “disciplined” in coverage and attachment points.

For the non-marine retrocession market at 1/7, mark rates up 10-20% against prior year treaty for loss-free accounts and 25-35% for loss-impacted accounts.

Within catastrophe retro treaty, those annual rate gains rose to a 30-50% range for loss-free and 50-60% for loss-hit.

Capacity focused on core and higher layers. “Core” layers were said to sell wherever “coverage and pricing hurdles were met,” Gallagher Re analysts wrote.

Capacity came on heavy everywhere that reinsurance cedents brought the much-sought single peril coverages.

The market remained "undersupplied" for bottom layers and frequency covers and capacity remained “constrained” in quota share, although the upward move in rates is said to be bringing some new capital.

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