(Reuters) – Property catastrophe reinsurance rates will fall 5% on average on a risk-adjusted basis at the key June 1 renewal date, reinsurance broker Howden Re said on Thursday, after “notable” rate rises in 2022 and 2023.
Greater levels of capital in the sector have contributed towards the reduction in rates, the unit of London-based Howden Broking Group Ltd. said in a statement.
However, the brokerage pointed to risks of reinsurance losses due to the expectation of an “extremely active” hurricane season this year in the Atlantic basin.
“While the recovery of dedicated capital and increased capacity signal a potential softening of rates, the forecasted active hurricane season and other market pressures could counteract these trends,” said David Flandro, head of industry and strategic advisory at Howden Re.
Increasing losses from natural catastrophes have pushed up reinsurance rates in recent years, and some household insurers have pulled out of areas at risk of major wildfires or hurricanes, such as California and Florida.
