Guy Carpenter points out outliers to drive placement discussions before renewals

The industry is positioned for growth.

The reinsurance market remains resilient amidst global challenges, with reinsurers gearing up to invest more in 2024 due to improved rates and increased demand. 

Business leaders shared these insights during a media briefing by Guy Carpenter, a leading risk and reinsurance specialist, ahead of the 1 January 2024 reinsurance renewals.

David Priebe, Chairman of Guy Carpenter, emphasised the growing demand for reinsurance, driven by reinsurers' willingness to deploy capital smartly. He highlighted the industry's expertise in transferring risk and its adaptability to navigate uncertainties.

 “Reinsurance industry veterans know this significant level of uncertainty is where our sector shines. Strategically transferring risk is our specialty and through innovation and collaboration we not only generate stability, but also opportunity,” Priebe said.

Lara Mowery, Global Head of Distribution, discussed the reinsurance market's capital growth and the strong performance of catastrophe bonds. She predicted continued positive momentum in the alternative asset class. Additionally, she said the total dedicated reinsurance industry capital is at $560b, up 5.6%.

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“The catastrophe bond market is experiencing a record first half of the year. By June 30, 41 different catastrophe bonds were brought to the 144A market for approximately $9.2b in limit placed, taking the total outstanding notional amount to over $37.8b.” In concluding her comments on the ILS market, Mowery said

Dorothée Mélis-Moutafis provided updates on property and casualty markets, highlighting rate increases and stability in capacity. She emphasized the importance of clear underwriting strategies for cedents.

Josh Darr addressed climate change and natural catastrophe risks, stressing the industry's role in building resilience against natural disasters.

"As our industry progresses in meaningful quantification of climate impacts, the dialogue will need to shift to the most cost-effective methods to build further resiliency for communities subject to this range of natural disasters,” Darr said.

The cyber market discussion noted rate stabilisation, carriers' comfort with cyber risk, and the potential for third-party capital. New cyber reinsurance structures were explored.

Julian Enoizi discussed systemic risks and the need for public-private partnerships to mitigate them, using examples of collaboration between Guy Carpenter and governments.

Overall, the reinsurance market is poised for growth in 2024, driven by improved rates and increasing demand, with a focus on innovation and collaboration to address evolving risks.