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Renewals Briefing: Serving up something soft
11 February 2010
Reinsurance pricing softened at the January 1 2010 renewals. Reactions asks what this will mean for pricing for the rest of the year.
Reinsurance rates declined across nearly every line of property-casualty business at the January 1 2010 renewal renewals, and the market shows no signs of hardening any time soon.
In property-catastrophe, rate on line prices decreased by an average of 6% globally, according to reinsurance broker Guy Carpenter’s Global Reinsurance Renewals report. The increase reported last year appeared to be a temporary interruption to the downward trend that started in 2007.
A combination of the recovery in global financial markets, low catastrophe losses in 2009 and recessionary effects on demand resulted in an excess of supply and heightened competition at this year’s January 1 renewal. The result was an unusually slow renewal, in which a number of contracts did not close until very late in the season as buyers sought to gain maximum pricing advantage, comments Chris Klein, global head of business intelligence at Guy Carpenter. Klein says the rate...
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