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Risk-adjusted property-catastrophe reinsurance pricing turns moderate at 1 June

Property-catastrophe reinsurance market pricing at 1 June 2024 has moderated, after notable rate increases in 2022 and 2023, observes Howden Re, the reinsurance and strategic advisory arm of Howden.

In a commentary, Howden Re says that average risk-adjusted property-catastrophe reinsurance rates-on-line are 5% lower within a typical range of -7.5% to – 2.5% at 1 June.

A period of adjustment

The reinsurance market is experiencing a period of adjustment, due in part to a resurgence in dedicated sector capital, which now exceeds 2021 levels, says Howden Re. This recovery, supported by strong ILS inflows, has increased capacity at the top of programmes and led to risk-adjusted rate reductions in higher layers.

Buyers and sellers engaged early in the year, with cedents targeting better terms and conditions to address previous increases in limits and attachments, as well as narrower wordings. Reinsurers exhibited a proactive stance by completing many programmes early, enabling the deployment of increased retrocession capacity as the renewal drew near. This strategic approach enabled some buyers to achieve more favourable terms in what remains a cautious market.

Increased capacity, shifting focus

The ILS market saw a notable increase in activity and competition, with over $3bn of issuance covering Florida perils alone so far this year. Collateralised retrocession capacity has likewise expanded, with capital providers’ assets under management growing significantly. Some reinsurers have begun to re-focus on property risks, aiming to grow in peak zones including southwest wind. This shift follows strong performances in 2023, with many reinsurers reporting their best financial results in decades. The increased level of ILS interest reflects a broader market trend towards diversified alternative risk transfer mechanisms, offering reinsurers and cedents more options to manage their exposures.

Mr David Flandro, head of Industry and strategic advisory at Howden Re, added, “The reinsurance market is at a critical juncture. While the recovery of dedicated capital and increased capacity signal a potential softening of rates, the forecasted active hurricane season and other market pressures could counteract these trends. Strategic adaptability and expert guidance are essential in navigating these dynamics.”


Whilst there are signs of downward pressure on property-catastrophe reinsurance rates due to capital recovery and increased market capacity, reinsurers remain vigilant. The anticipated active hurricane season and other market factors could still present significant challenges. Howden Re is committed to closely monitoring these developments and working with clients to navigate the evolving market landscape.

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Howden is a leading global insurance intermediary group with employee ownership at its heart. Founded in 1994, it operates in 55 countries across Europe, Africa, Asia, the Middle East, Latin America, the USA, Australia and New Zealand, employing 17,000 people.


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