Losses to firm property catastrophe renewals in North America, Europe at 1/1: Everest CEO
Everest Group’s CEO Juan Andrade said yesterday that his company is anticipating a firming of property catastrophe reinsurance rates in North America and Europe at the 1/1 January 2025 renewals, given the recent catastrophe loss activity experiences.
In addition, Andrade said during the Everest earnings call that demand for property catastrophe reinsurance is also expected to rise further at the renewals.
“In the aftermath of Milton and other international events, we expect property catastrophe pricing in North America and Europe to firm heading into the January 1 renewals. Demand for our capacity has also increased, following recent catastrophe events and high quality cedants continue to expand their relationship with us,” Andrade explained.
Going on to further explain, “When we were all in Monte Carlo, not too long ago, the talk was probably that pricing could come down somewhere around minus five, minus 10 for US property cat, but I think there’s a few things that have changed since Monte Carlo, similar to what happened in 2022 post Ian.
“We had two major storms hit the United States, in Milton and Helene, within essentially a week of each other and I think that certainly sets the perspective on what’s happening out there, right. I mean, we’re seeing rapid intensification, we’re seeing very powerful storms.
“So, that’s the US component. The other part of it is Europe. So, the thought process in Europe was also likely that things were going to be probably down minus five, etc. But you have the floods that took place this year, last year, now we have storm Boris in the third quarter, et cetera.
“So, our thinking is that pricing is likely to go up plus five plus 10, both in the US as well as in Europe. And you know, ultimately, we’ll see at the end of the day when the dust has settled. But I know our teams are actively quoting right now, and we’re actively engaged in that renewal process.”
Asked whether firm orders are coming in at those raised levels, Andrade explained that the renewals are not yet at that stage, but he noted that, “I do expect this to be fairly down to the wire, in terms of the negotiation.”
Everest’s executives explained that their clients are looking to buy more reinsurance capacity at the January renewals, with demand said to be rising “substantially.”
On how much of an influence hurricane Milton’s losses will be, Everest’s Jim Williamson said, “I think it absolutely has a 1/1 impact. Now, clearly, it’s going to have more of a 1.1 impact on diversified US cat programs than it would on a program in Europe. Europe’s got its own problems, obviously.
“So, there is going to be some differentiation based on where in the world the program is. But I think for all US programs, they all have a variety of southeast exposures. and I think the fact that there is this intensified hurricane activity and the near miss, I absolutely think it’ll weigh on pricing.”
