The reinsurance property CAT market: A journey towards new equilibrium


Swiss Re, a leading global reinsurance company, together with Swiss Re Institute, its research arm, recently published an extensive report examining the state of the Reinsurance Property Catastrophe (CAT) market.

The document highlighted significant changes over the past year and a half, while providing insights into trends shaping this vital sector.

The core motive behind the analysis was to understand the evolving equilibrium between capacity demand and supply in the Reinsurance Property CAT market. Swiss Re’s research indicates significant strides towards this equilibrium, despite ongoing challenges, as indicated by robust price improvements and tightening terms and conditions in recent reinsurance renewals.

Swiss Re, as a global provider of insurance and reinsurance solutions, utilises its research arm, Swiss Re Institute, to generate and share in-depth analyses on current market trends and predictions. The Swiss Re Institute relies on comprehensive data to explore the intricate dynamics of different insurance markets.

As outlined in the report, insured losses exceeding $100bn per annum are becoming the new norm. This trend is being driven by economic value growth, urbanisation, and climate change. Additionally, insurance and reinsurance companies are seeing leveraged capital positions rapidly unwind due to the decreasing volume of alternative capital.

While the 2023 renewals have made notable progress towards a new pricing equilibrium, trust in the reinsurance segment will only be fully earned through sustainable economic returns. The development of strong partnerships and innovative reinsurance structures are identified as crucial for managing volatility and meeting market expectations.

Swiss Re’s findings also highlighted a rise in natural catastrophe exposures due to economic growth and shifting populations. The latest sigma report from Swiss Re Institute emphasised that global insured losses from natural disasters escalated to $125bn in 2022, marking the fourth highest year for insured losses on sigma records.

Swiss Re’s team said, “At Swiss Re we’re committed to partnering with clients and partners with risk transfer solutions, risk insights and risk partnerships that can help to manage volatility and provide capital management relief.”

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