Abundant reinsurance capital eases costs for ANZ property risks: Gallagher Re

Reinsurer quotations were closely aligned with fewer outliers compared to previous years.

Reinsurance capital for property catastrophe programmes in Australia and New Zealand remained abundant, with multiple reinsurers seeking to expand capacity with selected buyers to meet their budget targets, according to a report by Gallagher Re. 

Whilst reinsurers generally aimed to maintain pricing levels, there were price reductions following a loss-free 2024 in both countries. 

Buyers that managed to differentiate themselves through their risk profiles achieved substantial risk-adjusted cost savings, the report noted.

As seen during the January 2024 renewals, reinsurer quotations were closely aligned, with fewer outliers compared to previous years. 

Reinsurers continued to prefer providing capacity for upper and more remote layers of protection, and there was limited interest in earnings protection covers in either Australia or New Zealand.

To address gaps in lower levels of their protection towers, many buyers turned to structured multi-year layers or sub-layer solutions, Gallagher Re said.

In some cases, reinsurance treaties excluded larger or more volatile property and engineering risks, placing them into newly established facultative facilities, it added.