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BOSTON – Jan. 1 reinsurance renewals will likely proceed in a more orderly fashion than was the case heading into this year, according to industry sources.
Additional capital and a resetting of expectations are likely to facilitate a less challenging process than at Jan. 1, 2023, sources said during a panel discussion Monday at the annual conference of The American Property Casualty Insurance Association.
Alex van Dijk, Morristown, New Jersey-based president, U.S. branches, at Guy Carpenter LLC, said the industry was “highly surprised” by the “significant” shift in pricing at last January’s renewals, saying it was greater “than our clients were prepared for.”
“I do see a more stable outlook for this renewal,” said Kerri Hamm, executive vice president, head of business development, for Munich Re U.S., adding that there was a “reset” of pricing and structure at last year’s renewals.
Molly Tully, Boston-based executive managing director, Aon Reinsurance Solutions, part of Aon PLC, said that “over the past 12 months, we have gone from a very dislocated, challenging market at Jan. 1 to what by April, May, June was a relatively stable marketplace.”
Ms. Tully added that the stability has been bolstered by a rebound of some $60 billion in the reinsurance industry surplus capital since bottoming in last year’s third quarter.
Mr. van Dijk said that positive third-quarter earning news from reinsurers has helped attract capital to the sector, which should continue into 2024 and 2025.
“I think a lot of it is going to be a question of where that new capacity will come in” and be deployed, Ms. Tully said.