Jim Williamson, CEO of Bermuda-based re/insurer Everest, said today that he expects the mid-year reinsurance renewals to be attractive, and that he doesn’t see property catastrophe reinsurance rates decreasing to a level that makes it a less appealing business for the firm.
Speaking during Everest’s First Quarter 2025 earnings call, Williamson said he wouldn’t be surprised if the company takes the opportunity to grow at the key 6.1 renewals, though he acknowledged that they will need to see what terms and conditions look like.
“And I think that would cut across both the Demotech companies, where we’ve had really terrific results and we have great relationships, as well as our more nationwide partners,” he said.
Williamson also observed a meaningful increase in reinsurance demand, with several clients expressing interest in purchasing additional limit.
“And so, a number of our clients are talking to us about buying more limit, which I think should be a favorable move around price. And obviously that’s offset by the fact that people have done incredibly well in property cat and people want to keep growing into the market. So, I think it’ll be, overall, quite attractive,” he explained.
While Williamson expects moderate pricing pressure for the remainder of 2025, he remains optimistic about the ample opportunities to deploy capital at attractive expected returns.
“We’ve said it before, and it bears repeating, rate of price change is important, but expected returns determine our willingness to deploy capital. In property cat, expected returns are excellent,” he stated.
When asked about pricing pressure in property catastrophe reinsurance, Williamson pointed to the sharp upward pricing correction seen during the 1.1 2023 renewal, where Everest achieved a 50% rate increase in its US treaty property book.
He continued, “And so, the fact that rates are now coming off, and you would have seen the 4.1 renewal in Japan, maybe that was down 10%, 1.1 2025 was down a bit. So, yes, it’s coming off a little bit. There’s a lot of interest, I think, among a number of carriers to grow in that business, because rates corrected to such a point that expected returns are still very, very healthy. And so, as long as that’s true, those return expectations sustain themselves.”
“I’m willing to continue to deploy capacity and capital to our best clients, and we’ve done very well with that strategy, and I expect that to sustain itself through 2025,” Williamson added.
He expressed confidence that property catastrophe reinsurance will remain attractive.
“There’s no sign, in my mind, that property cat in the reinsurance business is decreasing at a rate that would make it less attractive. The ROEs are still well in excess of my threshold for wanting to continue to deploy capital there,” said the CEO.
When quizzed on demand for reinsurance for upper and lower layers at the mid-year renewals, Williamson explained that it’s a challenging question to answer given the dynamic nature of the renewals.
“So, how much people want to buy at any particular level will be heavily influenced by how much it costs. And so, all things being equal, I think a lot of our cedents, whether it’s in Florida or in the Midwest or other parts of the country, would love to buy lower level, but the required pricing to get those deals done is more than most people are willing to pay. So, you usually don’t see that incremental demand get fulfilled there,” he said.
Adding: “Based on all that, I would suspect, as we’ve seen in prior renewals, that more of the demand will be in the top end, where people want to guard against coming out the top side of their programs, but obviously, time will tell.”
Finally, on terms and conditions, the CEO told listeners that he doesn’t expect to see any changes at the mid-year.
“One of the things that I’ve been gratified to see, I referred earlier to the need for discipline, and maybe the area where we’ve seen the absolute most discipline has been on terms and conditions. That’s been a major contributor to, I think, creating a more sustainable market. And people are not giving up on whether it’s hours clauses, attachment points, other contractual terms, and I don’t expect any at the mid-year renewal,” said Williamson.
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