Marsh McLennan Agency (MMA), part of the global insurance and reinsurance broker, has released its 2024 Commercial Property Insurance Trends report, highlighting a more balanced reinsurance market this year compared to the harsh conditions of 2023.

According to MMA, “In 2023, the industry witnessed the toughest property reinsurance market in decades.”

This was due to significant changes in policy structures leading to higher retentions for companies. Insurers, faced with soaring costs, were forced to consider cutting limits while absorbing higher retentions and facing rising premiums.

Additionally, active secondary perils and shifts in reinsurance structures left insurance carriers covering more losses on their balance sheets rather than passing them to reinsurers.

However, MMA states that “the volatility experienced in the 2023 reinsurance market seems to have stabilised.”

“The reported total median risk-adjusted price increases were in the single digits following treaty renewals from the first of this year. As more optimism enters the reinsurance market, we can expect a gradual return of appetite and capacity,” MMA adds.

The report further highlights another positive development, which is the expansion of coverage options for treaty renewals in 2024, including previously excluded or restricted perils such as terrorism, riots, and civil commotion.

MMA estimates that as the market continues to improve and insurers become more interested in reinsurance again, price increases are expected to slow down.

Although MMA can’t predict the frequency or severity of losses in 2024, it feels that it would take a significant event causing over $75 billion in losses for any serious concerns to arise.