Reinsurance Market Sets Its Focus for 2024 Monte Carlo Rendez-Vous

As the 2024 Monte Carlo Rendez-Vous (RVS) approaches, a poll conducted by Reinsurance News has revealed the top priorities for market participants heading into the reinsurance industry’s flagship event.

Published on September 10, 2024

reinsurance

As the 2024 Monte Carlo Rendez-Vous (RVS) approaches, a poll conducted by Reinsurance News has revealed the top priorities for market participants heading into the reinsurance industry’s flagship event. With over 130,000 respondents from Reinsurance News’ LinkedIn audience, the poll sheds light on key trends that will shape discussions and negotiations at the event, ultimately setting the tone for the 2025 reinsurance renewal season.

Price Sustainability Takes Center Stage

According to the poll, 38% of respondents cited sustaining price levels as the top priority for their early discussions at RVS. This focus on maintaining price stability signals the ongoing pressure within the reinsurance sector to avoid significant price reductions, even in the face of increased capacity and competition in some areas of the market. These early conversations will be critical in defining price expectations as the renewal season ramps up.

This emphasis on pricing aligns with the latest Moody’s survey of global property and casualty reinsurance buyers, which forecasts stable or slightly increased prices for 2025. Market participants are clearly gearing up for another year of careful price management, a reflection of the market’s ongoing efforts to recover from recent volatility and uncertainty.

Attachment Points and Terms Are Also Under Scrutiny

Close behind price, stability in attachment points and terms and conditions is the next most significant focus, according to the poll. These contract features, which define the triggers and limits for reinsurance coverage, are expected to be key discussion points in Monte Carlo. Many market insiders suggest that these terms might prove to be even more contentious than price negotiations.

At recent reinsurance broker briefings ahead of RVS, some industry experts speculated that attachment points and contract terms may take center stage in the upcoming January 2025 renewal discussions. Brokers are advocating for favorable changes on behalf of their clients, particularly in areas where risks have shifted in the hard market over the past few years.

Rising Demand and Growth Opportunities

In addition to price and contract stability, the poll also revealed that 24% of respondents will focus on meeting rising demand for reinsurance, a trend that continues to expand as new risks emerge and insurance needs evolve. With another 14% highlighting the importance of broadening their portfolios, it’s clear that growth opportunities remain a vital element of the reinsurance conversation.

Reinsurers are navigating a complex landscape where they must balance maintaining sustainable prices with addressing the demand for broader coverage. Brokers, like Aon, are pushing for reinsurers to take on more of the frequency and sideways risk that clients have absorbed during the hard market, especially at the higher layers of property catastrophe risk.

Implications for the Insurance Industry

These findings hold significant implications for the broader insurance industry. As reinsurers and brokers hammer out the terms of 2025 contracts, primary insurers must be prepared for potential trade-offs between price and coverage terms. Reinsurance costs directly impact how insurers price their policies, and any changes to attachment points or contract terms could affect the availability and affordability of coverage for consumers.

The increased focus on price sustainability and contract terms could also lead to longer, more protracted renewal negotiations, as both sides seek to secure the best possible outcomes. This may delay the finalization of reinsurance agreements, forcing insurers to navigate uncertainty as they plan their own pricing and underwriting strategies for the year ahead.

Looking Ahead

As the reinsurance industry converges at Monte Carlo, the dynamics around pricing, terms, and growth opportunities will set the stage for what is expected to be a pivotal year. The outcomes of these discussions will not only shape reinsurance agreements but also have a cascading effect on the insurance sector as a whole, influencing everything from policy pricing to risk mitigation strategies.

The 2024 Monte Carlo Rendez-Vous is poised to be a critical moment for the reinsurance industry, with far-reaching consequences that will ripple through the entire insurance ecosystem. Insurers, brokers, and reinsurers alike will be watching closely as negotiations unfold, setting the course for a challenging but opportunity-rich 2025 renewal season.