The reinsurance sector remains awash with capital despite last year’s losses, says Guy Carpenter in a report on the June 1 renewals.

The reinsurance broker says the sector’s capital position rose slightly to $US178 billion ($180.7 billion) by the end of 2011 despite one of its biggest loss years.

It says the relatively benign catastrophe experience so far this year will contain reinsurers’ efforts to increase prices, with insured losses of $US6 billion ($6.1 billion) in the first five months comparing with $US75 billion ($76.1 billion) during the same period last year.

“The reinsurance sector continues to function normally and, in the absence of a significant cat loss burden, the improving capital position is likely to contain any attempt at price increases throughout the year.”

Guy Carpenter says property catastrophe rates rose 9% on average at the January renewals and notes that US forecasters predict fewer Atlantic hurricanes this year.

Retrocession pricing rose in January and June, reflecting 2011 losses and continuing uncertainty about final loss numbers from those events, particularly the Thai floods.

“Capacity remains adequate for both US and excluding-US business, in part due to the number of retrocession sidecars activated at the end of 2011 (although the majority of these were able to utilise fully their capacity at January 1, 2012),” Guy Carpenter says.

It says some small, new entrants have entered the retrocession market.