MILLIRE ENG2024

North America 2024 was an active year in the US in terms of natural catastrophe activity, with large losses driven by two major hurricanes, Helene and Milton, as well as a series of severe convective storms contributing to 78% of the total global insured losses. Despite the uncertainty in the market in the aftermath of these two major hurricanes and early expectations of some market hardening, heading into the renewals, this sentiment was observed to ease with loss projections starting to diminish. Although reinsurers aimed to maintain stable pricing on risk-adjusted basis, driven by both traditional and ILS markets, competition was high especially at the top end of programs, resulting in notable price reductions for mid and upper layers. While retention levels remained mostly unchanged compared to the previous year, cedants managed to attract required capacity for lower layers, successfully using upper layers as leverage as many reinsurers focused on maintaining their lines at the top end of programs. Moreover, despite diverging pricing views in quotations, reinsurers ultimately prioritized supporting firm order terms by offering increased capacity and maintaining consistent contractual terms to secure desired signings. Supported by stronger portfolios, quota share agreements became more favorable for buyers, on the other hand, property per risk placements were influenced by reinsurer relationships and program performance. While loss-affected catastrophe programs renewed with risk adjusted price increases reaching up to 15%, loss- free catastrophe programs experienced rate adjustments changing from flat to down by 10%. For loss-affected risk programs, price increases fluctuated in the range of 10% to 20% while loss-free risk programs, saw price adjustments of up to 10%. Asia Pacific In 2024, global economic growth slowed compared to the previous year, influenced by tight monetary policies addressing ongoing inflationary pressures, the impact of central bank actions, and geopolitical risks. In contrast, Asia’s macroeconomic backdrop improved. Elections that occurred in several Asian countries during the early part of the year largely helped to create a stable economic environment. After several years of strict COVID-19 measures and a slow recovery in China, there was a marked rebound in key sectors such as technology, electric vehicles, and green energy, spurred by government stimulus efforts. Other emerging markets in the region also showed strong growth providing further impetus for the Asian growth engine story. The Asia-Pacific stock markets had a strong run in 2024, and the capital positions of major reinsurers in the region remained solid. Many reinsurers benefited from strong interest income driven by elevated interest rates from continued monetary tightening. The 2024 renewals were more orderly due to earlier preparations. Both sides knew what was coming hence there was a greater focus on price and request to quote from brokers. In terms of reinsurance market dynamics, there has been a notable shift toward an “ample” property catastrophe reinsurance capacity, spurred by attractive risk-adjusted returns in 2023. This has led to heightened competition for property catastrophe business, providing insurers with favorable outcomes, stable pricing, and in some cases, price reduction for certain segments. Insurers seeking additional limits found ample capacity to meet their demands. Upper layers were generally oversubscribed, signaling reinsurers’ increased willingness to deploy capacity and take on more risk than in previous years. There was renewed optimism in Southeast Asia especially in the lower layers of cover. Pricing on the whole has slightly softened from 2023 but remained technically attractive compared to the pre-pandemic levels. Nevertheless, the symptoms of a softening market were clear. In terms of reinsurance market dynamics, there has been a notable shift toward an “ample” property catastrophe reinsurance capacity, spurred by attractive risk-adjusted returns in 2023. Global Reinsurance Market and Milli Re 64 MİLLİ RE