Stage set for more comprehensible reinsurance market at mid-year and beyond: Aon’s Attard

Aon, the global insurance and reinsurance broker, has released its latest Reinsurance Market Dynamics report, revealing that the 1/1 and April 1 2024 renewals set the stage for a more comprehensible market for reinsurance buyers throughout mid-year and into 2025.

According to Aon, market conditions have improved further following the 1/1 renewals, with the broker describing the April 1 renewals as “more predictable and generally favourable to reinsurance buyers.”

With these ongoing improvements, Aon expects the enhanced conditions to persist, and says that the reinsurance market is now entering its next phase after the challenges of 2023.

The report outlines that as capacity continues to expand, opportunities arise for insurers to add more coverage at the top of their programs, while reinsurers collaborate with brokers and clients to distribute the burden of secondary perils more fairly.

George Attard, CEO of Reinsurance Solutions, Asia Pacific at Aon, emphasises, “There is still significant unmet insurer need, including solutions that address earnings volatility such as structured solutions and aggregate covers.”

Attard continues, “At 4/1 renewals, reinsurers have been more flexible in this regard, with growing opportunities for insurers to leverage competition among reinsurers for the attractive higher catastrophe layers to secure protection across their program.”

Furthermore, the report underscores the significance of the remainder of the year for regional insurers renewing at 1/1, as they grapple with a surge in natural disasters and escalating costs. Despite these challenges, these insurers are actively adjusting their insurance rates and portfolio structures to adapt.

Aon is currently collaborating with these regional insurers to help them adjust to these changes and take advantage of the improving conditions in the property catastrophe reinsurance market.

Attard emphasises that Aon’s goal is to “support insurers over the long term, not just the next renewal, providing a broad range of solutions and services, from access to third party and alternative capital, strategic consulting and analytics, through to talent and cyber resiliency.”

While market conditions have shown improvement and are expected to persist, Aon stresses the importance of thorough preparation and differentiation in achieving optimal renewal outcomes.

“We anticipate a significant increase in demand for property catastrophe capacity at mid-year renewals, with attractive opportunities for reinsurers to put excess capital to work on well-priced lower layer covers as well as meeting demand for increased limit,” says the broker.

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