Aon spotlights favorable property cat reinsurance renewal trends
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Property catastrophe renewals in Japan mimicked trends seen in the U.S. at Jan. 1 reinsurance renewals, with pricing flat to slightly down, while South Korea, China and India also saw increased competition for catastrophe business, according to a report preview Friday from Aon PLC.
Reinsurers also appear to be showing a returning appetite for property catastrophe business heading into midyear June and July reinsurance renewals, which include U.S wind exposures, according to one senior executive.
Approximately 60% of Asia treaty business renews at April 1, 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 U.S. exposed casualty treaties, Aon said in the preview of the report slated to be released April 2.
“The April 1st reinsurance renewals were more predictable and generally favorable 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 said. “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, he said.
Aon forecasts as much as $7 billion of additional demand from U.S. insurers for property catastrophe limit at the mid-year renewals, as programs keep pace with inflation and “evolving views of risk,” Aon said.
