Cyber steadies at mid-year renewal, structure trumps rate: Gallagher Re

The sum of mid-year treaty may be flat rates in nominal terms across the full spectrum,  Gallagher Re said in a report on mid-year renewals.

“Sizeable new pro-rata reinsurance capacity” emerging in late 2022 helped to “rebalance the capacity dynamics across the sector” by the time of the mid-year deadlines, analysts wrote.

Reinsurer interests may have been directed less towards squeezing out additional rate than redirecting the market increasingly towards standalone cyber placements, Gallagher Re suggested.

Proportional treaty renewals were said to see a "consistent approach" to gross loss ratio caps and only modest increases in ceding commission where profit outlook merited.

Excess of loss and stop loss treaty renewal proved brisk.

“There remains a healthy demand for, and meaningful supply, limit for this product,” Gallagher Re said, leading to “little movement” in risk adjusted rates.

Event or occurrence structures may have seen some increase in demand, but the tone of the trading sounds inhibited.

Demand has grown “meaningfully” over the past 12 months, but lands on only a “handful” of quoting markets with a “wide variance” in pricing, structure and wordings.

The cyber reinsurance market may have stabilised at the mid-year treaty renewals, with a recent capacity surge balancing the market for proportional treaty and brisk trade for excess of loss, Gallagher Re has indicated.

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