Property cat loss hit rates in Florida up 30-40% in mid-year renewal: Gallagher Re

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Global reinsurance broker Gallagher Re released its latest 1st View renewals report, which highlights the trends and dynamics at the July 1 reinsurance renewals.

gallagher-re-logoWithin the report, the broker highlighted the United States property market at the renewals.

One notable figure was that catastrophe loss hit business in Florida increased 30-40%, which is largely down to last year’s hurricane Ian, the strongest hurricane to make landfall in Florida since 2018’s Michael.

According to the broker, property cat rate on line indexes appear to be at record high levels and general sentiment is that current pricing levels are more than adequate.

At the same time, for US Nationwide, cat loss hit business increased 30%-50%, which again can largely be attributed towards hurricane Ian.

Gallagher Re noted that restrictions in coverage which had been seen during the Q1 renewals were removed from outstanding Q2 authorisations, and in many cases all risk coverages was resumed. Most notable softening position was on terrorism, however Strike, Riot & Civil Commotion (SRCC) aggregation limitations were still required by most reinsurers.

Elsewhere, as alternative markets looked to deploy their remaining capital, multi-year capacity from collateralized markets started to re-emerge at competitive pricing relative to traditional support.

The broker also addressed how risk excess capacity remained tighter, with a number of participants from London withdrawing from the segment. Meaningful increases in appetite for per risk exposure were not apparent, particularly on lower layers where market interest contracted.

In addition, top layer cat pricing across the US continued to tighten as reinsurers increased their minimum premium requirements in response to their own cost of capital.

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