Ultimate Guide to the Reinsurance Renewal

Ultimate Guide to the Reinsurance Renewal

Ultimate Guide to the Reinsurance Renewal 

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Strengthen Relationships for Collective Success

The reinsurance market is now in a more sustainable position, with rate adequacy for property catastrophe and strong investment returns already driving better results in the first half, despite above average industry natural catastrophe losses.

With the majority of property catastrophe programs renewing on January 1, we provide an assessment of demand-supply trends and successful renewal top tips to help insurers navigate volatility and make better decisions as we approach January renewals.

Read more on how we can work together to strengthen the reinsurance product’s value proposition to drive innovation and meet the growing needs of insurers for our collective success.

Five Things You Need to Know

  • 01

    Property catastrophe capacity has grown steadily throughout the year with global reinsurer capital at $620 billion.

  • 02

    Capital has entered the market via third party investors aligned with traditional reinsurers and through insurance-linked securities, indicating a key supply-side driver with total cat bond issuance volume in 2023 already up +10 percent from year-end 2022.

  • 03

    Reinsurance sector first half results showing further evidence that the recent reset in pricing, retentions and other terms and conditions has created a path to more sustainable earnings for the industry.

  • 04

    With the market on a stronger footing, re/insurers can now turn their attention to innovation and growth by optimizing capital strategies in today’s market conditions.

  • 05

    Losses in the second half of 2023 may yet influence the January 1 renewal, but clearly the market is now more orderly and predictable. Aon believes the market should now turn its attention to the pursuit of constructive collaboration and increased client centricity.

Top Tips for a Successful Renewal

As market stability brings optimism, Aon’s focus this renewal season is on optimizing capital strategies by building stronger reinsurer partnerships, accessing diversified capital sources, and driving differentiation through data and analytics for our clients.

  1. Understand your true cost of capital and rethink your risk transfer metrics
  2. Differentiate your portfolio with a custom view of risk
  3. Transfer reserve risk to free up capital for growth
  4. Consider alternative capital for optimal placement results
  5. Revisit holistic and executable strategic solutions to refine risk appetite and optimize capital

 

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