In the latest edition of its First View Report, covering the April renewals, Gallagher Re highlighted that against a backdrop of geopolitical uncertainty, softening primary markets and an unpredictable economic outlook, reinsurer resilience and strategic opportunities remain available to cedants.
According to the report, the April renewals continued the themes observed at the 1/1 renewals, with cedants achieving significant risk-adjusted rate reductions across property and specialty lines, while casualty pricing remained broadly stable.
Reinsurers also maintained a relationship-driven approach, actively and rationally competing for well-structured risks, supported by abundant capacity.
The report underscored the importance of strategic thinking for cedants as well, emphasising that the current market conditions presented a unique opportunity to reshape risk transfer programmes, not just to reduce costs, but to build structural resilience and improve portfolio economics.
Other findings of the report included:
- Japanese property CAT programmes ran loss-free, resulting in risk-adjusted rate change of between -15% and -17.5%.
- Japanese casualty programme pricing focussed on recognising significant underling mitigation of US exposure in portfolios, leading on average to slight risk-adjusted increases but reductions in total treaty premium spend.
Japanese cedants largely achieved risk-adjusted reductions in the high-teens on property CAT portfolios, according to the report. In casualty lines, negotiations relied heavily on cedants’ ability to demonstrate the impact of US exposure mitigation and reduced portfolio volatility. This led to lesser premium spend, while risk-adjusted rate ticked up on average to keep pace with loss trend.
Amidst several broader considerations, including ongoing geopolitical uncertainty and the continued robust financial health of reinsurers, the report states that Japanese cedants entered renewals with confidence in the ongoing benefits of their significant portfolio remediation, and were rewarded.
“There is an opportunity for clients to use the current window to reduce cost and to build the kind of structural protection that positions them well for whatever comes next,” said Gallagher Re Global CEO Tom Wakefield.