The Monte Carlo postcard…

In a few hours’ time, Monte Carlo’s Casino Square will once again be the sole habitat of fast cars and slow tourists as the global reinsurance caravan and its entourage moves on for another year.

There will be many more gatherings before the year is out – CIAB and APCIA in the US, Baden-Baden in Europe and SIRC in Singapore, for example – following the Rendez-Vous de Septembre’s traditional role as the curtain raiser for the industry’s Q4 meetings.

But Monte Carlo is also an agenda-setter for many of the discussions that will take place between now and 1.1 and which will shape the market trajectory in 2025.

So, what have we learned at a high level?

First, 2025 appears set to see the first downward pressure on property cat pricing for a number of years (pending the outcome of this year’s Atlantic hurricane season), but it is likely to be moderate and contained with geographical variations.

Italy is expected to remain firm, for example, as is Latin America. The US and Asia, in contrast, are currently expected to be down modestly, in the region of mid-single digits.

Regardless, reinsurers have repeatedly stressed their commitment to maintaining discipline and determination to stay away from frequency losses. The latter is likely to be one of the negotiating battlegrounds and perhaps the industry’s cat loss experience in H2 (or lack of it) will have some bearing on reinsurers’ steadfastness in this regard before the market clears.

In contrast, US casualty – particularly general liability and auto – is clearly causing some consternation and we expect some movement on ceding commissions in Q4 to accommodate reinsurers’ caution.

Overall the picture is one of relative stability and there is a general confidence that the increased capital in 2025 – in the form of start-ups, MGAs building balance sheets, sidecars and cat bonds – is unlikely to have a negative impact on overall discipline.

We noted in our Tuesday edition comment that a sub-theme emerging was a clear expectation of more corporate activity – including M&A. The last few days, for example, have seen chatter that Covéa may again return to Scor with the aim of combining the reinsurer with PartnerRe, while Aviva is the latest carrier to be linked with mulling a move for Lloyd’s insurer Hiscox.

Not for the first time, it would appear corporate M&A is on the rise at a time when some markets are softening, although a clear driver also appears to be the growing interest in accessing specialty business (which explains – at least in part – the growing interest in Lloyd’s ).

What else? Well, the expected return of Willis Re (in a joint venture with private equity house Bain Capital ) has generated excitement and with it the inevitable speculation on who might take on the tough but no doubt highly rewarded leadership role if successful.

But for now we bid au revoir to another Rendez-Vous and we look forward to tracking (and predicting) all the developments that occur in the run-up to another 1.1…