In August, this publication revealed that the carrier was seeking to buy the top layer in a sign that major buyers are returning to the market for additional capacity deemed too difficult to source during the 1 January renewal.
Sources previously told this publication that the additional layer will provide Chubb with protection for the Northeast US only and attaches at a remote level.
Underwriting sources said that the pricing was attractive for top-layer cat in a single region, and the deal is believed to have been over-subscribed. Big three brokers Guy Carpenter, Aon and Gallagher Re were all involved in the placement, sources said.
Chubb’s largest reinsurers are Swiss Re, Berkshire Hathaway, Hannover Re, Munich Re, and PartnerRe, according to S&P Capital IQ.
Increased demand from cedants at the top of their cat programmes was a key theme of Monte Carlo last year, with State Farm and Allstate both indicating that they intended to buy ~$1bn of additional limit, as revealed last year.
However, amid a surge in pricing and constrained reinsurer appetite, cedants largely dropped their early intention to buy more cat limit.
A key question is the degree to which this pent-up demand – spurred by inflationary pressure and exacerbated by the RMS model change – will be released at 1.1.
Demand for property cat insurance is expected to increase between 5-10% globally in 2024, globally compared to this year, with the higher percentages concentrated in areas where inflation is running higher, said Aon's head of global property Tracy Hatlestad.
Chubb did not respond to a request for comment.
