Following a hurricane season in which hurricanes were largely absent, property catastrophe reinsurance renewal prices are set to fall about 10% on Jan. 1, says SNL's Adam Cancryn, with prices for more U.S.-centric mid-year renewals likely to decline as much as 20%.
This will mark year #2 of deep cuts to reinsurance pricing - with a flood of new competition adding to the lack a natural disasters. "Unless you see some sort of massive change, it's not obvious what would change this environment that we've entered," says Sanford's Josh Stirling, and some analysts predict it will take $100B in industry losses to halt Y/Y rate-reductions.
For now, expect buybacks to continue, says Janney's Ryan Byrnes. "If you're a pure reinsurer, there's not much you can do with your capital right now, operationally."