Overall demand for reinsurance remained strong at the January 1 renewals, according to Willis Re in its 1st View report.However, there has been “clear divergence” in market views on liability, according to James Kent, global chief executive officer of Willis Re.“Some reinsurers are openly retreating and cutting back their in-force portfolios while others, who have been more bearish in prior years, are seeing opportunities to capture business and relationships in a rising primary rate environment that is forecast to continue for the next few years,” Mr Kent said.He also said: “Reinsurers have been resilient, but much more judicious in how they allocate their capital. Renewals saw significant variation in pricing and capacity depending on the geography, product line, loss record and individual client relationships. This variance resulted in a market demonstrating several views, in both pricing and terms and conditions, with more divergence than at any point in many years.”The growth of insurance-linked securities broadly stalled during the past year, and in some cases reduced, with collateral trapped from losses in 2019 and loss development from events in 2017 and 2018.The impact of the capacity reduction was felt most in collateralised retrocession contracts, according to the Willis Re report.Mr Kent said that property catastrophe treaty accounts at January 1, “most of which were loss-free in 2019 and not exposed to loss development”, proved less demanding than non-catastrophe exposed business.In an international overview of property reinsurance, Willis Re found that reinsurers did not achieve hoped for price increases due to oversupply for international catastrophe capacities. This resulted in flat to moderate risk-adjustment reductions for Asian, Latin American and EMEA renewals. In the Caribbean, Hurricane Dorian losses are estimated to be between $2 billion to $3 billion. Original rate increases are expected only in the Bahamas; the rest of the Caribbean, including Puerto Rico, are seeing generally flat renewal pricing, according to Willis Re.Mr Kent also said primary insurance pricing trends have continued to outpace reinsurance pricing movements which has allowed reinsurers “to factor in this positive development”.Client-centric underwriting by reinsurers was evident, with preferred clients being able to achieve their renewal requirements both in terms of pricing and conditions more easily than those viewed as noncore partners, according to Mr Kent.The legacy market also continued to grow as some reinsurers failed to find merger and acquisition options to trade forward, while others exited unprofitable lines.Mr Kent said: “The renewal period witnessed some difficult negotiations, but the reinsurance market managed to provide its clients with ongoing capacity across most lines of business. “The market continues to react in a logical fashion, providing sustainable support for the primary insurance industry, thereby helping to underpin wider market growth.”In the speciality sector, the cyber market saw ransomware losses exert upward pressure on rates, although this was counteracted by plentiful reinsurance capacity, according to the Willis Re report.Meanwhile, Guy Carpenter & Company, in its assessment of the January 1 reinsurance renewals, said the renewals were shaped by “deteriorating loss experience, a lack of new capital inflows and challenged environments in the primary insurance and retrocession markets”.It said reinsurance supply was largely sufficient to meet increasing demand.Guy Carpenter described the market as asymmetrical and said “classes where underlying performance remained positive and profitable often resulted in renewals as expiring, or in some cases modest rate decreases, while those with more strained operating conditions faced market corrections, some significant”.Peter Hearn, president and CEO of Guy Carpenter, said: “The (re)insurance sector is undergoing a period of transition as risk quantification strategies incorporate new information and risk appetites are adjusting accordingly.“The response of the reinsurance market to these dynamics continues to evolve. At January 1, there was more than sufficient capital relative to demand for most renewal placements, even as reinsurers navigated elevated losses and adjusted underwriting assumptions to reflect changing perceptions of risk. However, market conditions have clearly tightened and negotiations became a function more of price than capacity.”While David Priebe, chairman of Guy Carpenter, said: “The reinsurance market enters 2020 in a solid position with initial analysis of dedicated reinsurance capital up slightly as compared to a year ago, bolstered by mid-single digit growth in rated capital in 2019. “Accounting for the impact of trapped capital, total available capital at January 1 is close to flat. While reinsurers will continue to deploy capacity cautiously, with cedents’ performance and loss experiences scrutinised closely, the sector remains well capitalised overall.”