Reinsurance rates for credit cover buck trend and rise
Willis Re says the cost of trade credit reinsurance has risen by as much as 40% over the past 12 months, the FT reports.
“Trade credit was the thing that really spooked people,” said James Vickers, chairman of Willis Re.
Nervousness about political risks around the world has pushed up prices in that class of business by 10% to 25%.
Airline reinsurance rates are up by as much as 15%.
$600m of losses from summer hailstorms in Switzerland pushed up reinsurance prices there by as much as 40%.
Rates have fallen slightly – typically by 5%-10% in many lines of business.
“If 2010 is another year like this year, with far fewer losses than expected, there is no reason to expect prices to start going up,” Vickers said.
Adding to the downward pressure on prices is a surge in underwriting capacity at Lloyd’s of London, up 25% for 2010 to an estimated £22.8bn ($36.6bn).
