The reinsurance cycle has turned, according to credit ratings agencies.
AM Best London general manager Jose Sanchez-Crespo described market conditions as "off peak", while Standard & Poor's (S&P) credit analyst Stephen Searby said that the longevity of the hard market had been reduced.
Sanchez-Crespo said questions remained over how fast rates would fall, as investment markets and capital in the global reinsurance industry had still not returned to pre-2001 levels, and the current spate of hurricane activity could slow the softening.
Searby said that while property reinsurance rates had fallen, pricing remained adequate, and terms and conditions remained tight.
In casualty, Searby said that while rates for US directors' and officers' risks and errors and omissions risks were softening, most casualty classes were carrying small increases.
S&P forecast that the 2004 year of account would be the peak of profitability for property, while casualty was likely to peak in 2005-2006.
