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Reinsurance rate hike slower than expected

Reinsurers have reported generally stable pricing and capacity during the latest renewal period after initial fears of a dramatic rise in rates.

Willis Re last week reported general stability in the reinsurance market, citing initial signs of financial market recovery and a lack of major underwriting losses in the first two quarters.

A US market review by fellow reinsurance broker Guy Carpenter reached a similar conclusion, reporting a “steadying” of rates compared to previous periods at 15% higher on average. Capacity was deemed adequate across most classes of business.

Generally, buyers of reinsurance among the US catastrophe market faced rate increases of between 10-15%, according to Willis Re.

High marine sector prices for energy-exposed business in the Gulf of Mexico has however forced some buyers into co-insurance or higher retentions after the region was hit hard by storms in recent years.

CEO Peter Hearn claims the industry “has managed to clear the hurdle of providing sufficient capacity at acceptable prices to their client base for this year. Nine months ago, this outcome was very much in doubt.”