Reinsurers are continuing to show favouritism among different insurers in property classes, a new report says.

Willis Re’s analysis of the June 30 reinsurance renewals period reveals that reinsurers are differentiating their pricing and support programs depending on the client, and are focusing on supporting existing key relationships.

Reinsurers are “more amenable to clients that are presenting very clear strategies and positions to reinsurance markets”, Willis Re Australia CEO Cameron Green told insuranceNEWS.com.au today.

That approach is being implemented regardless of the class of business, he says.

“Reinsurers are being more favourable to clients that they like trading with – clients that show strong differentiation in the market and have a healthy attitude towards buying reinsurance. They’ve bought it consistently and maintained retentions [and] they haven’t withdrawn placements from the market after they’ve had losses on them.”

The report says reinsurers are “increasing pricing pressure” on loss-affected layers and reducing their capacity when rates are inadequate. They are also resisting pressure to reduce rates on loss-free layers.

In casualty, reinsurers are proving reluctant to support more rate reductions on excess of loss business, with small rate increases seen on the lower layers of treaties seeing increased claims or loss activity.

Mr Green says the cost of property reinsurance is now steadily increasing, with reinsurers “pricing their product at a closer level to their technical price” than in previous years.

“The loss that’s in the market has obviously put pressure on their businesses, and in turn they’re moving more towards their technical price,” he says.

However, Willis Re’s report says there is still plentiful capacity overall, despite some reinsurers scaling back capacity slightly.

And insurers are doing their bit to address risks. “The primary market is doing a lot of remediation work to reduce their exposure to badly performing insurance lines, driven by global losses in the last few years,” Mr Green told insuranceNEWS.com.au.