Increased levels of alternative capital have weakened premiums for June 30 reinsurance renewals in the US, according to reinsurance broker Guy Carpenter.

It says in a new report that the inflows of alternative capital are likely to continue for the rest of the year.

“The impact has been dramatic this year, with robust catastrophe bond, sidecar and collateralised reinsurance activity triggering downward pressure on rates in the traditional market in order to remain competitive,” Global Head of Property Specialty Lara Mowery says in the report.

About $US10 billion ($10.6 billion) of new capital entered the market over the past 18 months as investors were attracted by such factors as higher yields.

Capital from alternative markets now accounts for an estimated $US45 billion ($47.68 billion) – about 14% of the global property limit – with implications for reinsurance pricing and availability.

“The reinsurance sector has exited the fairly consistent post-Katrina Florida property catastrophe range,” Global Head of Business Intelligence David Flandro said.

“This has been driven by a very real change to the sector’s capital structure, and this change is continuing unabated.”

The report says Florida pricing has declined more than anticipated ahead of the June 1 renewal period.

Reinsurance pricing has fluctuated moderately over the last two years during Florida renewals, with expectations for 2013 influenced by excess capacity and the fact that the state has been hurricane loss-free for seven years.