Prices will fall by up to 20% this week, Willis predicts
Reinsurers are agreeing to withdraw the terrorism exclusion clauses they insisted on in the wake of the September 11 attacks as competition for renewal premiums intensifies.
According to a report in the Financial Times, other terms are set to be relaxed as reinsurers as face plummeting rates and competition from catastrophe bonds.
Prices are at their lowest levels since the early 2000s and, according to Willis insurers, are set to fall as much as 20% this week.
Willis Re International chairman James Vickers added: “It had been a pricing game – but now reinsurers are also looking at the terms and conditions.”
As well as removing terrorism exclusions, Vickers said reinsurers were extending the length of time they would meet claims after natural disasters, such as covering damages caused by hurricanes for an extra 24 hours.
The insurance industry lost about $40bn from the September 11 attacks.