Benign catastrophe activity resulting in plentiful capacity has capped upwards pressure on reinsurance prices, according to Guy Carpenter, the reinsurance broking arm of Marsh.

David Flandro, Global Head of Business Intelligence at Guy Carpenter, says that while $US6-$8 billion ($5.86-$7.82 billion) of capital has entered the reinsurance market since the catastrophes of 2011, limited catastrophe losses for this year have allowed the reinsurance sector to rebuild its capital position.

This has been the main contributor to subdued price rises at the July 1 reinsurance renewals.

Insured losses during the first six months of this year totalled $US11 billion ($10.76 billion) – a marked contrast to the $US76 billion ($74 billion) lost in the first half of last year.

Locally, Guy Carpenter reported that “reinsurers were constrained in their efforts to increase rates” in Australia and New Zealand, with casualty lines renewing at between 4% down to 3% up and professional lines renewing flat to down 3%.

“There was some reduction of reinsurance capacity from markets who had withdrawn from underwriting in the region due to property losses but this did not affect renewals that saw sufficient new markets to complete placements as required,” the reinsurance broker says of local casualty renewals.

Differentiation by company, the application of new risk measures and disciplined underwriting were all features of property reinsurance renewals, with US property renewals up on average 6.5% on last year’s prices.

Guy Carpenter reported rate cuts of about 3-5% for aviation reinsurance globally at July 1, due to overcapacity and the absence of significant losses since mid-2010, while global marine and energy renewals were flat.

“As we enter [the US] hurricane season, we will continue to track catastrophe activity, reserving and asset-side issues in our analysis of pricing trends for the remainder of the year,” Mr Flandro said.