The European Property Cat reinsurance renewal at 1.1 2024 demonstrated a market adjusting to a period of significant cyclical and structural change, marked by stable renewals thanks to more favourable supply-demand dynamics.

The absence of major losses in 2023, favourable development for Hurricane Ian, and increased capital inflows towards the end of the year resulted in stable renewals. Renewals were influenced by loss experience and inflation, with overall pricing increases moderated, except in territories with sizeable reinsurance recoveries in 2023, such as in Turkey following the earthquake. This concludes significant changes in market conditions from the previous year, highlighting a shift towards stability and predictability in the reinsurance market, which should be mirrored in the insurance market, albeit it is too early to start talking about any softening.

Supply and demand balanced out, with returns for 2023 exceeding reinsurers' increased cost of capital with a margin. This balance was aided by retained earnings, ample retrocession capacity, and a buoyant insurance-linked securities (ILS) market.

Looking ahead to the mid-year renewals, the stable and orderly conditions observed at the start of the year, coupled with the improved balance between supply and demand, suggest a market environment that could continue to support stable or slightly adjusted rates, dependent on specific market segments and loss experiences in the interim.