The run-up to the 1 July reinsurance renewals saw a continuation of the pricing and structural market dynamics that defined the January renewal period, with mid-year placements catching up and aligning with prevailing market undercurrents, according to a report from broker Gallagher Re.

While there were significant increases on a year-on-year basis, the report describes the market as “orderly and rational” with adequate capacity from the reinsurance market available to support client needs. This resulted in a less-stressed renewal process in most cases.

Gallagher Re suggests that the market has faced a continuation of pricing and structural dynamics as reinsurers sought to bring terms and conditions into line with those seen at
1 January and 1 April renewals. New capital entering the market, coupled with moderated demand, through increased retentions and limited purchases of additional limit and clearer expectation management, have led to a more orderly renewal.

The report also found that there are limited signs of completely new reinsurance entities forming, and the trend is one of consolidation into fewer, larger reinsurance entities which it says, in the absence of any major losses, points towards pricing stability.

Tom Wakefield, Global CEO at Gallagher Re, said: “With the improved terms and conditions available in the reinsurance market, some existing reinsurers are leaning into the hardening market, committing more of their existing capital, as well as any new capital they are raising, to reinsurance. However, in contrast to other historic hard markets, there are limited signs of completely new reinsurance entities forming and the current trend is one of consolidation into fewer, larger reinsurance entities which, in the absence of any major losses, points towards pricing stability.”

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