Aon reports favourable property cat reinsurance renewal at 1 April
April’s property catastrophe renewals in Japan mimicked trends seen in the US at 1 Jan, with pricing flat to slightly down, while South Korea, China and India also saw increased competition for catastrophe business, according to Aon.
Reinsurers appear to be showing a returning appetite for property catastrophe business heading into mid-year June and July reinsurance renewals, which include US wind exposures, according to one senior executive.
Approximately 60% of Asia treaty business renews at 1 April, and while pricing was broadly flat for property catastrophe reinsurance, certain Asia-Pacific markets and product lines remained challenged and subject to a tightening in terms and conditions, Aon said.
Challenged lines include property per-risk reinsurance, industrial fire accounts, certain natural catastrophe loss-affected regions, and US exposed casualty treaties, Aon said.
“The 1 April reinsurance renewals were more predictable and generally favourable to reinsurance buyers,” George Attard, CEO of Asia Pacific for Aon’s Reinsurance Solutions, said in the preview.
“As mid-year renewals get underway for the catastrophe-exposed markets of Florida, Australia and New Zealand, reinsurers are indicating a strong appetite for catastrophe risk,” he added. “We would expect the positive trend of the January and April renewals to continue at mid-year renewals, with adequate capacity for property catastrophe risks and enhanced pricing competition.”
Insurers looking to purchase additional limit will also find adequate capacity to meet their needs, said Attard.
Aon forecasts as much as $7bn of additional demand from US insurers for property catastrophe limit at the mid-year renewals, as programmes keep pace with inflation and “evolving views of risk”.
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