In this article from The Insurer, Dean Klisura, President and CEO, Guy Carpenter, joins John Doyle, President and CEO, Marsh McLennan, for the third quarter earnings call for Marsh McLennan. Among several topics discussed, John and Dean spoke extensively about expectations in the reinsurance market, heading into the January 1 renewal season. (Please note: the full article may be behind a subscription wall.)
“As we look to January 1, the market appears to be more orderly than last year, but we expect underwriting discipline to continue,” John said. “On the property side, we expect firm pricing, but a more stable market with adequate capacity and increased reinsurer appetite. In casualty, the market is more cautious, with reinsurers assessing prior year loss development and inflation. We expect capacity to remain stable.”
Dean indicated that he expects challenging market conditions to persist for property catastrophe placements, driven largely by inflation. This effect will vary by region, he continued.
“It won't be what we saw last year, as an example, in the US and Europe, but we do think that firmness will be there,” he said. “We do expect additional capacity and an increased appetite from reinsurers to write more business, particularly at higher-attaching property cat layers.”
Regarding casualty, Dean anticipates capacity to remain adequate even as the US market is “trending very cautiously.”
“In all of our meetings with reinsurers this fall, everybody expressed concern with prior-year loss development in US casualty in certain lines, driven by economic and social inflation,” Dean explained. “We do expect some downward pressure from reinsurers on ceding commissions for our clients with quota share contracts and certain casualty lines.”