Aon reports single-digit hikes at property, cat reinsurance renewals
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Property and catastrophe reinsurance renewals at Jan. 1 saw average increases in the single digits and proceeded “relatively smoothly,” according to a report Wednesday from Aon PLC.
The more modest rate increases were in marked contrast to the double-digit property hikes of a year ago during what many described as an arduous, even contentious, process.
The property market benefitted from greater availability of capacity, including catastrophe, as “most reinsurers entered the renewals with ambitions to grow in property catastrophe reinsurance,” the report said.
Catastrophe markets, meanwhile, showed adequate capacity to meet buyers’ need but saw headwinds from “a backdrop of prior-year reserve deterioration and concern for adverse litigation trends,” the report said.
Property markets were further bolstered by the insurance-linked securities sector, where the catastrophe bond market set a record with $15.4 billion of new issuance and an outstanding catastrophe bond market balance at year-end 2023 of more than $42 billion, an all-time high, according to a statement released with the report.
The record cat bond issuance included 30 issuing insurers and 14 issuing reinsurers for a combined $10.1 billion as well as government entities with $4.8 billion issued. Record fourth-quarter issuance of $5.2 billion more than doubled the previous fourth-quarter high of $2.4 billion in 2021, the statement said.
The California Earthquake Authority issued $1.505 billion of catastrophe bonds in 2023, a record amount for any issuing entity over a calendar year period since the market’s inception, according to Aon.
