The reinsurance industry has shrugged off its losses from Superstorm Sandy, with pricing at the Japanese April 1 renewals flat or down across all business lines, Willis Re says.

Treaties that were challenging to fill a year ago are now oversubscribed, according to its 1st View report.

This follows a $US35 billion ($33.63 billion) influx of capital to the sector from non-traditional sources, as investors seek higher returns at a time of low interest rates, it says.

Many reinsurers see the capital – which is continuing to flow in – “as a direct threat to their existing portfolios”, Willis Re says.

But some companies are responding by developing third-party capital management propositions “to offer their own skills and platforms as fund managers”.

Sandy appears to have had little impact on pricing in the sector, which otherwise enjoyed a relatively benign 2012.

Willis Re expects “more aggressive pricing” at the June 1 Florida renewals and says pricing globally is “flat to slightly down on loss-free lines of business”.

Global reinsurance premium volume is being squeezed by a combination of mergers and acquisitions and higher retentions taken by larger insurers.

“Against this background, the outlook for many traditional reinsurers is challenging, with profit margins coming under pressure [this year],” Willis Re Chairman Peter Hearn said.