{"id":524,"date":"2025-03-25T09:30:20","date_gmt":"2025-03-25T10:30:20","guid":{"rendered":"http:\/\/alteredconcept.com\/?p=524"},"modified":"2025-03-28T11:54:46","modified_gmt":"2025-03-28T11:54:46","slug":"la-wildfires-may-support-mid-year-rate-expectations-for-property-cat-goldman-sachs","status":"publish","type":"post","link":"http:\/\/alteredconcept.com\/index.php\/2025\/03\/25\/la-wildfires-may-support-mid-year-rate-expectations-for-property-cat-goldman-sachs\/","title":{"rendered":"LA wildfires may support mid-year rate expectations for property cat: Goldman Sachs"},"content":{"rendered":"

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Insured losses from the Los Angeles wildfires, which are currently estimated between $35-$50 billion, could support property catastrophe pricing heading into the mid-year reinsurance renewals, according to Goldman Sachs, however, analysts still expect mid-year rate trends to remain broadly in line with the January 2025 renewals.
\n<\/span>
\n\"wildfire-image-firefighters\"Analysts highlight that the big four reinsurers: Munich Re<\/span><\/span><\/span>, Swiss Re, Hannover Re, and SCOR, have already absorbed between 24% and 42% of their full-year natural catastrophe budgets due to the first-quarter wildfire losses.<\/p>\n

\u201cIt remains very early to fully assess the impact on the mid-year renewals, however, the scale of the losses could suggest some upward pressure, although we are still of the view that mid-year renewals will be broadly consistent with what we have seen in January,\u201d Goldman Sachs said.<\/p>\n

Despite the severity of the California wildfire losses, Goldman Sachs maintains that the property and casualty (P&C) reinsurance market is in a post-peak margin cycle, following years of rate increases. This was reflected in the January 2025 renewals, where risk-adjusted pricing declined by 0%-2%, across Goldman Sachs\u2019 coverage.<\/p>\n

Notably, SCOR\u2019s pricing remained flat, benefiting from lower retrocession costs, while Hannover Re saw a 2.1% decline.<\/p>\n

These trends, combined with strong reinsurer returns, increased capital availability, and rising frequency loss activity for primary insurers, contributed to the first overall rate decline in nearly a decade.<\/p>\n

While the Los Angeles wildfire losses may help limit further rate declines, Goldman Sachs remains cautious on any significant upward pricing movement at the mid-year renewals.<\/p>\n

Analysts suggest that despite the large industry losses, overall reinsurance pricing will likely remain broadly consistent with January trends.<\/p>\n

However, this could change if further catastrophe events were to strain budgets and capital availability across the market in the coming months.<\/p>\n

As the mid-year renewals approach, market participants will closely monitor how capital levels and loss experience evolve, particularly given the uncertainty surrounding wildfire-related claims and broader catastrophe activity in the months ahead.<\/p>\n

LA wildfires may support mid-year rate expectations for property cat: Goldman Sachs<\/a> was published by: www.Artemis.bm<\/a>
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