CEE cat loss-free property reinsurance treaties renew -2.5% to +5% at 1.1: Gallagher Re

According to reinsurance broker Gallagher Re, Central and Eastern Europe (CEE) catastrophe loss-free property reinsurance treaties were renewed -2.5% to up 5%, while catastrophe loss-hit reinsurance rates increased 10% to 20% at the January 1, 2025 renewals.

Focusing on property cat excess of loss, the CEE region was heavily loss impacted in 2024, with major flooding that took place in September due to Storm Boris causing widespread damage.

According to Gallagher Re’s 1st View Report for the 1.1 2025 renewals. the underlying growth of buyers’ catastrophe excess of loss portfolios, driven primarily by the delayed impact of inflation, has been substantial, which has ultimately led to increased capacity requirements along with more premium on contracts ceded to reinsurers.

In spite of the post-loss environment, retentions were not under great pressure, whilst no meaningful changes were made to contract wordings at 1.1 in the region.

Gallagher Re noted that the main focus at CEE property cat excess of loss renewals centred around price discovery, where the firm reportedly saw one of the “broadest variations in pricing, resembling the 1.1 2023 renewal, as buyers and reinsurers looked to find clearing prices.”

Interestingly, the reinsurance broker stated that flood was the primary pricing peril for countries that were loss impacted, which creates some debate as to whether views of this risk should change in the future.

The reinsurance broker went on to add that whilst the CEE region witnessed a modest influx of new capacity from new entrants, the more remarkable impact came from existing players eager to deploy additional capacity in what was seen as an “attractive market,” which according to Gallagher Re, ultimately suppressed rate increases.

Moreover, the report highlights that risk excess of loss continues to be a harder marketplace than catastrophe, driven by ongoing loss activity throughout the CEE region.

“Retentions were under greater pressure, even those that ran loss-free, as reinsurers attempt to avoid frequency. Cash spends were also up. Some reinsurers demonstrated an increased level of appetite, but it still lagged behind the catastrophe market levels. There were minimal over-placements,” Gallagher Re said.

And lastly, the reinsurance broker noted that quota share treaties that ran well reportedly renewed largely as expiring, whilst reinsurers’ appetite remained stable.

“The trend of moving from proportional to excess of loss continued at the 1.1.2025 renewal, with several buyers switching to risk excess of loss structures,” Gallagher Re concludes.

Furthermore, Gallagher Re’s report also revealed that global property reinsurance renewals were largely orderly at the January 1, 2025, renewals, and although reduced risk adjusted pricing was greater than many sellers planned for, is “entirely rational and expected” given plentiful capacity and robust results for 2024.

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