TCIP treaty to test property cat resolve at 1.11 renewal

The Turkish Catastrophe Insurance Pool (TCIP) will be closely watched as a precursor to 1 January as market observers look for early guidance on property cat appetite, The Insurer can reveal.

Dask – Turkish earthquake

While the full structure being sought for the 1.11.2022 incepting cover has not been confirmed, Swiss Re and Munich Re have historically taken large participations of the program, alongside other major reinsurers in Bermuda and the London market.

According to the TCIP 2021 annual report, its 2021 incepting reinsurance cover featured a lower limit of 5bn lira ($274.7mn) while the upper limit on the program stood at 36.9bn lira ($2.02bn).

Some market practitioners canvassed by this publication were sceptical of the read-across from the TCIP account to the wider property cat market, citing the non-correlating nature of Turkish cat risk as well the pool’s position as the core outlet for reinsurers seeking access to the peril.

However, those seeking early guidance on conditions in the key battlegrounds of the US and Europe have spoken of TCIP as having the potential to evidence underwriting resolve at the upcoming international catastrophe reinsurance renewals.

The upcoming renewal season is largely expected to be shaped by a reduced appetite for property cat business with a number of market commentators already warning of a potential capacity crunch.

Upcoming property cat renewals are likely to mirror some of the dynamics seen at mid-year, with peak zone business under the most pressure.

In an interview with The Insurer TV to mark the beginning of #ReinsuranceMonth earlier this week, Gallagher Re CEO James Kent said that there was “definite hardening” in property cat and pointed to the market being “more constrained”.