Flat pricing, niche margins: what reinsurers expect at 1/1 renewals

The reinsurance market is heading into the 1/1 renewals with muted expectations on pricing, but reinsurers are already pinpointing where margins can still be found.

Key points:
Flat to soft pricing dominates
Margins shift to specialty lines
Structured deals gain traction

As Monte Carlo draws near, new survey data suggests the real battle for returns will be in specialty and structured deals, not core cat treaties.

Only 5% of respondents expect significant increases across most lines, while the majority anticipate conditions either flat or softening, according to Intelligent Insurer’s 2024 pre-renewals season survey.

The data revealed that 28% expected pricing to be largely flat with a few exceptions, while 29% foresaw downward pressure in some areas. A further 20% suggested a moderate increase in selected lines, but few believe in a broad-based hardening.

“Downward pressure is virtually everywhere, with only isolated exceptions,” one respondent wrote. “Unless a class is underperforming or showing clear near-term volatility, cedents will be pushing for, and likely getting, price relief.”

When asked about profitability, specialty lines and structured or alternative solutions were seen as offering the most attractive margins by 37% of participants, outpacing property where loss activity has weighed on sentiment.

One broker noted: “Property is not a uniform story any more. Non-cat business may hold pricing better than traditional cat, but overall we’re talking about stability, not escalation.”

That sentiment is reflected in the numbers: while very few see hikes across the board, 29% identified property non-cat as a source of attractive margins, compared with 24% for property catastrophe.

“Clients are still demanding protection in both segments,” another respondent explained. “But reinsurers are becoming more selective; non-cat programmes are seen as steadier, while cat covers continue to face intense competition and capital pressure.”

If pricing is flat, then differentiation must come from margins, and the survey highlighted exactly where reinsurers expected to deliver the best returns.

“Specialty remains a genuine margin play,” one respondent commented. “Areas such as energy, aviation and political risk are complex, restricted by capacity.”

The equal focus on structured solutions also underscores the appetite for innovation: multi-year parametric deals, captive fronting and tailored risk-transfer vehicles are no longer considered niche.

One participant noted: “Structured deals give cedents predictability and reinsurers diversification. In a market where traditional treaty rates are static, that’s a compelling equation.”

Casualty (21%) and cyber (20%) ranked behind property and specialty in expected margins, reflecting a cautious optimism: cyber still carries systemic risk concerns, while casualty’s long-tail nature makes reserving discipline essential.

“Cyber is moving fast, both the risk and the underwriting approaches,” one participant wrote. “We’re optimistic on margins, but only if accumulation management keeps pace with exposure. This is a market in transition. It’s not the sharp hardening of recent years, nor is it a return to unchecked softening. It’s a patchwork: some flat, some soft with selective bright spots where expertise and innovation carry value.”

Another respondent wrote: “The renewal conversations will be less about chasing broad rate increases and more about finding targeted, profitable segments. It’s a market where underwriting judgment and capital discipline will separate winners from the rest.”

The headline may be flat pricing, but the subtext is margin focus: “Specialty and structured solutions are where reinsurers can still make their capital work.”

Heading into 1/1, reinsurers are navigating a pricing environment defined less by momentum and more by nuance. Flat or declining rates will dominate conversations, but margin opportunity still exists, particularly in specialty lines and structured solutions.

As one survey respondent summed up: “This renewal is not about chasing rate everywhere. It’s about knowing where to play, and where to step back.”

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.