Catastrophic events, such as major hurricanes and the Sept. 11 terrorist attacks, traditionally have led to hard markets that in turn drove the formation of startup reinsurers to fill capacity needs. Reinsurers launched in “the class of 1992,” “the class of 2001,” and “the class of 2005” when on to become market leaders.
But something different has happened in the current hard market. This time, a class of 2023 never formed — and there are few prospects for 2024 and 2025.
In past years, large-scale catastrophic losses precipitated the shift to a hard market by depleting existing capital and forcing up reinsurance prices. Under these old market rules, a hard market would whet investor appetite “to allocate funds to