Japan property catastrophe demand was marginally down year-on-year at the April 1st, 2024, reinsurance renewals, while some increases in retentions were offset by a small amount of additional capacity purchased, reports Gallagher Re.
In the reinsurance broker’s 1st View Report, the firm highlights how there was a “significant uptick in supply of capacity from reinsurers.”
According to the broker, catastrophe loss-free business for Japan property cat saw price movements of -5% to +1%, due to demand being down, and supply being up.
Gallagher Re noted that major changes in underlying portfolios were driven by a number of factors, which include:
- Divergent views of risk.
- The impact of reverse franchises introduced in previous years.
- Vendor models offering different views of organic portfolio growth.
- Portfolio and underwriting changes.
In addition, reinsurers reportedly offered a narrower range of views compared to those that were seen at the last renewal, and buyers were encouraged to set more “aggressive pricing targets” based on early messaging from reinsurers.
Buyers within Japan property cat pushed for reinsurers to show flexibility and on other covers and lines of business, favoring larger multi-line reinsurers.
However, some reinsurers were said to have been disappointed with signings, with reinsurer appetite outstripping demand.
Moving towards Japan property per risk & pro rata, Gallagher Re noted that reinsurers positioning ahead of the renewal was firm, but that it softened as renewal approached.
Gallagher Re explained that this was driven by:
- Reinsurers’ desire to secure cat excess of loss signings.
- Good performance of domestic property portfolios more clearly apparent than at last renewal.
- Strong messaging on underwriting improvements, especially for overseas portfolios.
It also appears that the “significant pressure” on coverage terms that was seen during last renewal was absent this year, Gallagher Re highlighted.
Japan property per risk & pro rata risk-loss free business saw price movements of -2.5% to +5%, according to Gallagher Re.
