Australian mid-year property catastrophe reinsurance renewals have been described as relatively flat with some price reductions after a reset and more benign conditions, and with global capacity increasing.

“The current market has achieved a balance in terms of supply and demand, with reinsurers less hesitant than previously to deploy their significant capital,” Gallagher Re CEO Tom Wakefield said.

In Australasia, there was less variance in property catastrophe quotations compared with a year ago as reinsurers have reached levels of long-term price sustainability, the reinsurance broker says.

“The majority of buyers achieved relatively flat property cat renewals, with some risk-adjusted decreases available on higher layers due to both reinsurer competition and a slight shift downwards in minimum rate online levels,” the Gallagher Re 1st View report says.

Australian catastrophe loss-free property rates eased 0-10% while loss-hit risks rose 5-10%. Renewals were stable in casualty, with “ongoing and strong support” for programs with perceived price adequacy.

Guy Carpenter Asia-Pacific CEO Tony Gallagher says demand in the region rose 4% while supply increased 10%, leading to some softening of market conditions.

“In Asia-Pacific, first-half renewals proceeded orderly, with rate softening across non-loss-affected programs,” he said. “Terms, conditions and structures stabilised with minor cedent-driven changes.”

According to Guy Carpenter’s analysis, most property placements were completed early or on time in a transitioning market.

Global property catastrophe risk-adjusted rates were generally flat to down mid to high single digits, and in some cases upper layers were down 10% or more for non-loss-impacted accounts, in a “moderating but still robust” pricing environment, it says.

Aon says that after challenging renewals a year ago, the latest round brought a welcome return to stable conditions in Australia and New Zealand.

Relatively benign natural disaster losses over the past 12 months paved the way for more predictable outcomes, with reinsurers “clearly signalling” renewed appetite for catastrophe risk in the region.

The largest insured loss events were the Christmas and New Year storms in eastern Australia and Cyclone Jasper, but Aon says these were largely borne by insurers, partly due to higher net retentions imposed during last year’s renewals.

“While reinsurers are more willing to support lower layers, the market’s appetite to write traditional aggregate reinsurance covers remains limited.” Aon says. “However, alternative solutions are being more readily discussed.”

Aon says the launch of the cyclone reinsurance pool tempered demand for property catastrophe reinsurance by $3-$4 billion last year. Large insurers had joined the pool by the end of December, and smaller insurers with relevant risks must join by the end of this year.

“Now in place, the pool is well understood by the market and the cover has been integrated into insurers’ catastrophe programs,” the broker said.