The reinsurance market is constructed to handle major events like hurricane’s Helene and Milton, according to Eric Andersen, President of global insurance and reinsurance brokerage, Aon.
Hurricane Helene was the sixth named storm of the 2024 Atlantic hurricane season, and became the fourth of the season to make landfall in the US on September 27, 2024, when the storm struck west-southwest of Perry, Taylor County, Florida as a Category 4 with maximum sustained winds of 140 mph.
However, not too long after Helene’s landfall in the Big Bend region of the Florida coast, hurricane Milton made landfall in Southwest Florida on October 9, 2024.
Speaking earlier today during Aon’s earnings call for the third quarter of 2024, Andersen addressed how conducive the reinsurance brokerage environment could wind up being heading into 2025.
He said: “The reinsurance market is constructed to handle events like Helene and Milton. That’s why it exists. It’s doing great work. There’s money flowing into the area for reconstruction. So it’s all good, on that front.
“I will say that as we were going into the fall, you definitely had pressure from clients, which I think was rightly applied around pricing and around attachment points based on the way the market had moved over the last three years, where there were significant program changes as reinsurers sort of changed their position.”
He continued: “Certainly post these two events, there is conversations that are happening around does it flatten the pricing? Does it slow the rate of descent? However you want to phrase it. And I would say it’s early.”
Andersen went on to say that there is still substantial capital within the marketplace, and depending on where companies sit across the world, Europeans in particular are “pushing hard” for price decreases and attachment point relief based on where they sit.
“I think, you know, as these negotiations take a firmer sort of structure over the next eight to ten weeks, I think you’re going to see clients continue to push either for rate or for attachment point relief going forward, and we’ll see where it turns out.”
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