Stronger signs of elevated buyer confidence

Ghassan Mansour, head of facultative reinsurance at Acrisure Re, examines the ever-shifting market dynamics.

As we navigate through yet another challenging wind season, it’s clear that the dynamics of the global reinsurance market are shifting. Despite ongoing hurricane activity at the time of writing, which could still reshape outcomes, there are strong signs that the market is tilting in favour of buyers, specifically across certain lines of business and geographies.

This shift marks a meaningful development for our clients, who find themselves in a stronger negotiating position than in the prior 12 months – demanding that both reinsurers and brokers alike put their best foot forward and innovate more than ever. Clients know and expect relief in their premiums especially if they have been profitable following years of rate increases.

The shifting sands of the current market

The past six months have been telling for the reinsurance industry. Many saw a return to profitability in 2023, fuelling ambitious growth plans that have since been tested by the realities of 2024.

Ongoing pricing adjustments in certain areas are gradually tipping the scales in favour of buyers, and not just in less catastrophe-exposed property lines, with clean risks now allowing for much more favourable terms from incumbent reinsurance players seeking to retain business and preserve existing shares.

Clients are becoming more assertive as a result, and understandably so. After years of facing tough market conditions, they are now in a position to demand better conditions. This shift is especially apparent in certain pockets of the market, where the momentum towards a buyer’s market is impossible to ignore.

Those with solid, diverse and profitable portfolios are leveraging these dynamics to push for customised solutions that go beyond the limitations of standardised offerings. By capitalising on the flexibility of facultative reinsurance and tapping into the creativity of the Lloyd’s market, clients stand a better chance of securing tailored coverages at advantageous structures in terms of pricing and capacity.

The importance of Lloyd’s for facultative reinsurance

Lloyd’s has long been recognised for its flexibility and agility. This allows it to address every aspect of placement risk by blending innovative solutions with traditional domestic reinsurance offerings, offering a level of creativity that is often unmatched.

As market conditions evolve, Lloyd’s is becoming even more crucial by helping to unlock compelling placement results for clients previously restricted by one-size-fits-all approaches.

In a landscape where the need for diverse capacities is more pronounced than ever, our clients can tap into both the global Lloyd’s reinsurance offering as well as domestic markets, crafting a resilient and tailored approach that meets their unique needs.

Facultative reinsurance: a strategic tool

Facultative reinsurance remains a powerful enabler helping carriers to alleviate some of the market pressures both in terms of pricing and exposures. It is giving clients access to a broader, global pool of reinsurance capacity, offering more flexibility and creativity in addressing complex placement needs.

As clients become more vocal in their demands for better terms, facultative reinsurance is playing a key role in coverage and capacity constraints, providing a vital lifeline in an environment where standard solutions may no longer suffice. Such bespoke solutions are meeting demands head-on rather than forcing them into a predetermined mould.

With the ever-shifting market patterns, the demand for competitive, personalised and client-centric solutions will only intensify – and those expectations are here to stay for the foreseeable future. At Acrisure Re, we’re committed to staying closely attuned to our clients’ evolving needs, leveraging our expertise and the strengths of our relationships with Lloyd’s and the global reinsurance market to deliver exceptional results.