Property Catastrophe Reinsurance Market Sees Price Softening Amid Surging Demand

Reflecting a collective perspective on a pivotal market shift, there was surging demand for property catastrophe reinsurance at the June 1 and July 1 renewals, matched by abundant reinsurer capital.

“There’s plenty of supply. The industry capital has grown,” said Scott. “Pricing and rates continue to moderate through the first six months of the year, based on all the capital availability. The supply certainly outweighs the demand.” Scott added that “terms are holding.”

Although there is growing demand, reinsurance executives commented the market is still more competitive than in prior years due to an excess of capacity.

In other lines of business, the casualty reinsurance market was less favorable with concerns voiced over loss trends resulting from the current U.S. litigation environment and the previous year’s loss development. One executive interviewed noted that carriers who performed remediation of their casualty portfolio fared better than others that didn’t.

The article also noted an increased interest among cedents toward diversifying reinsurance coverage and the growing industry trend to tap into broader capital markets, pointing to sustained future growth opportunities. Scott commented that Aspen uses third-party capital to bolster property catastrophe and casualty capacity.

Read the Business Insurance article here.