Bill Berkley, Chairman and CEO of US-based global specialty insurer WR Berkley, says “fear must overcome greed” in order for the market to turn.

Speaking on Friday to insuranceNEWS.com.au during a short visit to Sydney, Mr Berkley said while rate rises of 8-10% – or possibly even 15% – are required for a return to acceptable margins, “pricing is a state of mind”, and a change in the state of mind of most insurers is still required.

“When capital gets no return, management has to raise prices – they have no choice,” Mr Berkley said. “When fear overcomes greed, that’s when things change.”

He says negative underwriting results make price rises “inevitable”, but unless the rises are accelerated by fear and a changed mindset, they will take five quarters to cycle through to the financial results of insurers.

He says that across WR Berkley’s book, prices in the first quarter were up on average 1%, and he expects that the second quarter will show larger rises.

Locally, he says his company’s expanding general insurance and reinsurance businesses are seeing “modest” increases in prices, but customer feedback indicates there is still plenty of capacity for catastrophe business – something Mr Berkley describes as “astonishing”.