Marine placements renew flat to down 10% at April 1

By Michael Jones

April 1 - (The Insurer) - Additional capacity in the marine reinsurance market meant renewal rates ranged from flat to down 10% for marine and energy excess of loss (XoL) placements at this year’s April 1 renewals, three marine reinsurance broking sources told The Insurer.

The latest renewals marked a continuation of the market characteristics observed at January 1, with oversupply of capacity having a much greater impact on outcomes than large losses such as the Baltimore bridge collapse.

Two senior marine reinsurance broking sources said that “healthy capacity” had resulted in marine and energy XoL programs renewing in the range of flat to a 10% rate reduction.

In its renewals commentary, Howden Re said the additional capacity that entered the market at January 1 had added to the competitive backdrop, with healthy growth ambitions from new entrants coming alongside an expansion from established markets.

New entrants included Silverflame Re, Volante Syndicate 1699 and Brit Re.

The top end of placements faced the greatest competition and largest rate decreases, two marine reinsurance broking sources said. They explained that these higher layers are more sought after due to their greater remoteness from losses.

Like January 1, these sources said structures and conditions were largely unchanged at the April 1 renewals.

However, there was some concern with the political violence and terrorism (PVT) element of composite XoL treaties, said two specialty reinsurance sources. PVT is one of the classes within a typical specialty XoL treaty, alongside marine and energy.

One senior specialty reinsurance source said that there were sometimes sizeable differences in conditions between the direct PVT market and those offered in the reinsurance space. They said this included differences in hours clauses and geographical areas.

April 1 is also a significant renewal date for specialty retrocession covers.

Two senior specialty reinsurance sources said that specialty retrocession placements, including marine, energy and PVT, had softened slightly after an increase in available capacity from the tight conditions seen at April 1, 2024.

This led to rate decreases in the region of flat to down 5%, the sources said. One specialty reinsurance market source said that rates had come down from what was already a high point.