Mid-year renewals look orderly as cedents fall in line

Mid-year treaty reinsurance renewals have turned orderly vis-à-vis their January and April predecessors as cedents have fully taken reinsurer pricing demands to heart, a top P&C reinsurance industry leader has claimed.

“This is a more orderly renewal,” RenaissanceRe CEO Kevin O’Donnell told analysts during a call.

“The reason it is orderly is because there has been better expectation setting with regard to what margin expectations are for reinsurers.”

RenaissanceRe blew off suggestions that new capital might come into the market at a pace to turn the tide on the ongoing hard market. Demand remains strong and should be drawing capital, O’Donnell said.

“Right now we are still seeing strong demand and we expect strong demand to continue into 2024, so I think having new capital in is a sign of a healthy market,” O’Donnell said under questioning. “This is a dynamic market – there is always capital coming in.”

Analysts present on the call had probed on the impact that might be felt after signals from Berkshire Hathaway of a more aggressive stance through April renewals and into the mid-years. Everest Re has also made a splash with word of $1.5 billion in fresh equity.

“This market has legs,” O’Donnell said. “We think it is a really constructive market.”

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