International casualty reinsurance underwriters fear softening terms and conditions will prove unsustainable, a survey by the Lloyd’s Market Association (LMA) reveals.

About 68% of casualty treaty reinsurance underwriters questioned believe that by relaxing terms and conditions, the market risks repeating historical mistakes.

In the “straw poll” of 19 underwriters – representing 75% of international casualty gross written premium at Lloyd’s – all but one identify a softening of terms and conditions in their market.

Of those, 39% say the changes are having a material effect on underwriters’ exposures.

LMA Senior Executive, Underwriting Patrick Davison says the survey was “fairly informal” but is worrying because it “points strongly towards a buyer’s market in which traditional underwriter discipline is under considerable pressure”.

One area of concern the survey raises is the increasing prevalence of differential terms – when some following carriers on a reinsurance slip or on a different layer underwrite the risk on terms and conditions different to those agreed by the slip’s lead carrier.

“These create headaches for the market’s back office and the efficiency with which claims in a subscription market can be managed,” Mr Davison said.

“Differential terms might be one indicator that some reinsurers have concluded further amendments to coverage or retentions are unsustainable.”

The LMA represents underwriters at Lloyd’s. Its membership manages a gross premium income of £26 billion ($56.56 billion).