The pair said the broker was still trying to assess what the loss would mean for the market and that it was not yet apparent how reinsurers would shift their risk appetite in response.
“Some seem to be OK, and it’s business as usual,” said Hofmann. “Those that rely on funds and retro – there is a pause going on [as they assess the loss].”
Traetow said: “Even before Ian, we were preparing our clients for a more challenging market.”
He added that this would be exacerbated by the hurricane loss.
One projected shift has been for reinsurance programmes to move upwards, to facilitate cedants buying more limit at the top end of their covers as their portfolio values rise because of inflation.
Reinsurers are also looking to exit the sub-$10bn attachment levels, but some cedants would need to buy there, Hofmann observed.
“We’re working with the market to create options – whether it’s traditional reinsurance, structured reinsurance or ILWs,” he added.
While some reinsurers have exited or cut back on their property risk appetite, it remains to be seen whether this creates spillover competition in casualty or specialty, the pair said.
Hofmann noted that 1 October casualty excess-of-loss renewals had been tight as reinsurers pushed back on certain features.
However, reinsurers were continuing to leverage the cat limit they were seeking to deploy to secure business in other segments.
“The appeal still seems to be there for that,” added Traetow.
The brokers said Aon’s segmenting of its reinsurance operations into product verticals and regions boosted its response to the catastrophe event.
"We're finding we’re in a much better position leveraging our data,” Hofmann added, suggesting that a harder market might make it more difficult for smaller, challenger brokers that have less analytical resource.
