Hurricane losses and poor investment returns force up prices

Reinsurance prices will leap up at the 1 January renewal round as a result of the $25bn (£17bn) of hurricane losses, the FT reports.

In an analysis, the FT says reinsurance prices will rise because:

  • losses from hurricanes Gustav and Ike
  • the erosion of capital by weak stock and bond markets
  • turbulent stock markets and constraints on borrowing making it difficult for reinsurers to replenish their balance sheets
  • conditions hampering the start-up of new reinsurers.

The FT quotes Munich Re, Willis, Aon and Brit Insurance.

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