Aon Market Report - Jan 2024

Aon's report "Reinsurance Market Dynamics" explains the background against which the 2024 renewals were conducted.

The report is available here on Aon's website.

One useful quote (page 6) confirms our views that 2023 has fared well for reinsurers, reflecting the degree of market correction and patterns of loss activity:- "Traditional reinsurers generally performed well in the first nine months of 2023, despite a continuing frequency of medium-sized natural catastrophe events, suggesting that the recent reset in property pricing, retentions and other terms and conditions has created a path to more sustainable earnings."

Importantly though, the high ground that reinsurers staked out last year in terms of attachment points, rates and narrower program terms and conditions, has not been relinquished because the new/extra capital was disciplined and cautious in its deployment owing to the ongoing worries about climate change, inflation, and heightened geopolitical risk.

As Aon's report (page 12 says): "Most reinsurers will perform well in 2023, building capital among the incumbents and potentially encouraging investors to back new company formations in 2024. However, a rapid shift in industry dynamics is not expected, given the ongoing uncertainty around the impact of climate change and inflation on future loss costs."

Other brokers' renewal reports such as Howden's will be covered in future Hampden Underwriting Research commentary.