Competition from alternative markets is putting further downward pressure on reinsurance pricing, according to Marsh subsidiary Guy Carpenter.

Its renewal briefing says strong reinsurer balance sheets and low loss experiences also contributed “as markets offered abundant capacity at reduced pricing”.

Global Head of Property Specialty Lara Mowery says buyers received significant rate reductions for Florida and non-Florida renewals.

“It is clear the pace of the pricing decline observed [last year] has not relented,” she said.

“As catastrophe bond pricing continues to fall, reinsurers are continuing to find ways to compete. New product offerings are abundant, as flexibility and tailored coverage are becoming trademarks of this rapidly evolving market.”

Investor demand for insurance-linked securities remains robust and capacity from alternative markets now accounts for $US50 billion ($53.93 billion), or 15% of the global property catastrophe reinsurance limit.

Guy Carpenter says retrocession pricing has also fallen, due to over-capitalisation in the marketplace and a lack of significant losses.

This year’s hurricane season – which could be affected by an El Nino event – will have a “strong influence” on the future direction of reinsurance pricing and capacity.