The London Market faces a stand-off with Japanese insurers and reinsurers over the April renewal season. Disagreements over rates will also lead renewals for India and Korea being delayed by a month, according to market analysts.
On 1 April, the Japanese market renews all its risks, including personal accident, property, marine hull and cargo. It also provides cover for windstorms and earthquakes and is reinsured by organisations such as Swiss Re and Munich Re.
But the Tokio Marine & Fire Insurance Company's reinsurance director and general manager Takashi Oka said reinsurers were demanding premiums much higher than the Japanese were willing to pay.
"They are requesting a huge increase in rates, generally up 30% to 40%," he said. "The Japanese companies are saying this is the price and the reinsurers are talking very different figures. They want a 30% higher rate than what we think."
Oka said the disagreements could lead to companies being unable to finalise their renewals in time. He added reinsurers were also requesting terrorism exclusions.
"This is the biggest renewal in the Japanese calendar," he said. "It is a potential stalemate if we do not agree."
Reinsurance consultant Charles Catt said India and Korea were also facing a difficult April renewal period for treaty reinsurance.
"Reaching agreement of terms is causing more problems than anticipated," he said.
"They will be about a month late. No one seems to be giving any ground, so it could be a long drawn out discussion."
He said reinsurers also wanted terrorism exclusions, coupled with "substantial" rate rises.
