The 1/1 renewal date is the biggest for the insurance industry. It marks not just the renewal of client policies but also the recalibration of insurers’ treaty reinsurance agreements. Historically, the outcomes of these reinsurance renewals set the tone for the insurance market in the year ahead.
In 2023, the industry faced a challenging market, driven by reinsurers adjusting rates and retentions after five consecutive years of losses. Dubbed the "double, double, half" year, 2023 was one of the hardest markets in insurance history. Clients grappled with difficult choices as they faced terms that included double the rate, double the deductible, and half the capacity.
Fast forward to 2024, and the reinsurance market told a different story. With reinsurers finally achieving profitability and no major hurricanes making landfall in 2023, renewal terms leveled off for many. At Virtus, we capitalized on this stabilization to deliver significant savings for our clients. By leveraging relationships with both European and U.S. carriers, we secured year-over-year (YOY) premium reductions ranging from 10% to 20%.
This trend aligned with broader market outcomes, as many reports highlighted decreases of 6–7% YOY for reinsurance renewals. Our recent discussions with habitation markets in London revealed even better results in some cases, with decreases ranging from 6–12%.
Looking ahead to 2025, we remain optimistic. Despite challenges such as the recent LA wildfires, the market appears well-positioned for further improvement. Key factors include:
The reinsurance market's evolving dynamics directly influence renewal outcomes. As we move into 2025, the combination of market competition, carrier confidence, and proactive risk management creates an environment ripe for continued improvements. At Virtus, we remain committed to leveraging these trends to deliver the best possible outcomes for our clients, ensuring they are well-positioned for the year ahead.