The global reinsurance market has returned to its peak following a dramatic increase in insurer and reinsurer capital, according to Aon Benfield.

The reinsurance broker’s latest market outlook finds capacity for the global catastrophe reinsurance market has been restored to near peak December 2007 levels. Capital fell 16.9% during 2008.

Softer reinsurance rates are forecast to dominate renewals between April and July, with any rate rises generally tied to prior exposure.

Aon Benfield Analytics CEO Bryon Ehrhart says competitive forces are again at play despite a “disciplined” approach from reinsurers.

“At January 2010 renewals, reinsurers showed markedly less anxiety than last year and were more focused on gaining the largest possible signings on their reinsurance program authorisations,” he said.