Guy Carpenter’s Tony Gallagher Discusses Rates, Capacity Ahead of January 1 Renewals

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In this interview with The Insurer, Tony Gallagher, CEO, Asia Pacific, explains how reinsurance capacity is rebounding in Asia, but it is still somewhat restrained at lower layers.

“Assuming a normal catastrophe year in 2023, we expect that the capacity utilization will continue to increase, with more new, dedicated reinsurance capital coming in the second half of the year,” Tony said.

“We have observed an increase in supply, and we expect that the rate cycle has peaked,” he continued. “However, there will be exceptions for certain companies and geographies where loss activities have continued in 2023.”

Recent renewals in the region have seen capacity constraints at lower layers, as reinsurers push for higher retentions.

“Aggregate covers are currently limited and expensive,” Tony continues. “Overall, the demand has been stable, considering what we have seen so far in 2023, but supply has been short. Therefore, pricing is expected to remain firm for lower layers.”