Softer global reinsurance market conditions benefited Australian underwriters at the mid-year renewals, while insurer consolidation and the cyclone pool have affected demand.

Howden Re says rate declines of 10%-15% on loss-free business have been broadly achieved, with some buyers securing larger reductions.

Market consolidation, particularly involving motor clubs, has sharpened reinsurer focus on Australian business and overseas capacity continues to be drawn by portfolio diversification benefits and pricing that still provides adequate returns.

“This has been a renewal in which prepared buyers with well-constructed programs have achieved strong outcomes, not just on price but on structure and terms,” Howden Re Australia head John Philipsz said.

“The ANZ market continues to command genuine reinsurer attention, and the conversations we are having reflect that.”

The government cyclone reinsurance pool has altered the peril hierarchy for some insurers.

“For many, cyclone has moved from a primary peril of comparable weight to earthquake, to one that is now demonstrably less material,” Howden Re said.

“Reinsurers have fully incorporated this shift into their appetite and pricing, and it has contributed to the overall broadening of support for Australian programs.”

Catastrophe experience has also been relatively benign over the past 12 months.

Aon says storms and hail in Queensland and NSW last year, which caused an estimated $3 billion in insured losses, fell within expectations and had little impact on reinsurer appetite or pricing.

The broker also flags corporate merger and acquisition impacts, with two state motor club insurers acquired in the past 12 months and a third transaction pending.

“Further consolidation could temper demand for catastrophe reinsurance purchased and drive further reinsurer competition and pricing in the market,” Aon said.

Gallagher Re says some Asian and London reinsurers that previously had limited appetite for Australia and New Zealand or exited after historic loss activity are offering flexible capacity to try to gain new shares.

At the same time, incumbents are looking to at least preserve capacity and, in most cases, grow.

The capacity has led to some insurers considering or purchasing new structures or aggregate solutions at the bottom of programs, but Gallagher Re says take-up has not been universal due to cost.

Gallagher Re says rate reductions on loss free catastrophe programs ranged from 12.5% to 17%, while for loss-hit cover pricing was flat to down 5%.