Without another major natural catastrophe prices won’t rise
General Re and Axis Re have said reinsurers cannot put up premiums without a further major natural catastrophe, Reuters report.
"This industry really has trouble raising rates unless there's some catastrophe," Franklin Montross, chief executive of Berkshire Hathaway reinsurance unit General Re, told a reinsurance conference in Zurich.
The earthquake in Chile and winter storm Xynthia in Europe earlier this year had not been enough to 'harden', or increase, prices on their own.
Softening market
"The high level of natural catastrophe losses in the first quarter is not a market-changing event," said Axis Re Europe chief executive Karl Mayr. "It is a soft market now and is softening."
"We are seeing more aggressive purchasing behaviour from costumers and brokers now," he said. "Reinsurance markets are not growing, so we have to expect increased competition in the market."
General Re's Montross said he was disappointed at reinsurers failing resolve to demand higher prices from clients. "I thought there would be more discipline in the reinsurance market but we're not seeing that now," he said. "We're at a critical point now going into the 2011 renewal period."
