Attachments have not slackened. July renewal could be a little stronger: Beazley CEO
Attachment points for property catastrophe reinsurance have not slackened in 2025 with the risk-sharing remaining stable between primary markets and reinsurers, but with more loss-affected renewals at the mid-year, Beazley’s CEO Adrian Cox believes the outcome may be a little stronger than earlier contract signings.
Speaking today during an analyst call after announcing Beazley’s first-quarter 2025 trading update, Adrian Cox commented on the property reinsurance market.
“Despite the competitive environment, rates remain attractive, and there are good prospects for continued growth,” Cox explained.
Adding that, “Increased flow into the E&S market in the US persists, and although prices have come down a little, reinsurance terms and conditions and most importantly reinsurance attachment points have not slackened, and we think this will help maintain discipline.”
Speaking about property insurance and reinsurance more broadly, Beazley’s CEO said on market conditions, “We do believe that rates remain adequate overall for our property division. It’s not an even playing field, though, as we look across the reinsurance portfolio, the high value homeowners portfolio, the large risk business that we’re writing, the syndicated, shared and layered business, the mid market business, the SME business, London versus the US.
“There are differences in risk-reward there, and so we are being very active in managing our aggregates and our exposure growth across those to make sure that we optimise. But we remain comfortable.
“If the property market continues to deteriorate we will continue to look at that. And if we do think rates are no longer adequate, we will signal as such. But I think the portfolio management that we exercise is going to become increasingly important.”
Moving back to specifically discuss reinsurance, Cox said, “Prices have been coming down in the reinsurance market a little. I flagged in my narrative earlier on that it’s a price issue, rather than a terms and conditions and attachment point issue, and I think that’s very important.
“Prices don’t have the same impact on the underlying behaviour of the insurance market as terms and conditions do.
“The fact that most insurers retain a lot more risk than they used to is very important, and so I don’t believe that there are the opportunities to arbitrage reinsurance to enable us to grow the top-line more in the way that there used to be. But that is a good thing. Primary insurance market discipline is very important to us, as it gives better long term opportunity and means that we can price our business properly.”
Finally, speaking about property catastrophe reinsurance and the upcoming mid-year renewals, Cox said that he believes the market could be a little stronger than has been seen at the earlier renewals in 2025, given the greater volume of loss-affected programs that renew.
“I think what we are expecting is that, whilst the reinsurance market remained competitive for the catastrophe renewals at 4/1, the vast bulk of those renewals were for companies that had very little exposure or much to do with California at all. You know, in Japan, for example, and therefore fairly un-impacted by that,” Cox said.
Continuing, “As we think about those who will be buying reinsurance between now and the 1st of July, a lot of those were impacted by last year’s catastrophe activity, and indeed, the wildfires in January.
“So I do think the outlook for those renewals is distinct from what happened at 4/1, and certainly from what we’re seeing so far, reinsurers appear to be adopting a slightly different strategy for that.
“We’re hopeful that the reinsurance market will be a little stronger, but we will wait and see, and we’ll react accordingly.”
