As you read through the January 2024 IRL you will read that property rates saw double digit increases and lots of doom and gloom. WTW reports Property reinsurers cut capacity. As reinsurers lost their footing, particularly after Hurricane Ian, they made wholesale cuts in property reinsurance capacity, resulting in both substantial price increases and larger retentions for many retail insurers. Retail insurers began overhauling their property insurance portfolios, reducing capacity and driving a hard property market for consumers that, in many ways, surpassed hard conditions experienced in 2020. For property insurance, these hard conditions have prevailed throughout 2023. With the combination of inflation, Maui wildfires and convective storms, the industry will close 2023 with more than $100 billion of insured property losses, despite what may end up being a mercifully calm Atlantic hurricane season. A possible silver lining could be that the restructuring of reinsurance treaty retentions throughout the year will leave the capital base poised to generate meaningful returns. If that occurs, additional capital could come into the property insurance marketplace and help mitigate the hard property market in 2024.

Another possibility is that property insurers will seriously begin to use parametric insurance to manage risks like flood and wind which would remove these perils from their underwriting which will allow for better results because many of the other perils can be quantified.