The 1 January renewal season has seen reinsurance rates plunge
The reinsurance market saw rates plunge in the annual renewal round, according to two major reinsurance brokers.
Willis Re reported rates at the 1 January renewal had fallen by in some cases as much as 15% on the back of fierce competition and relative low catastrophe losses in 2007.
The broker said the reinsurance industry was showing signs of “reverting to its historic pattern of feast or famine”.
Meanwhile, Guy Carpenter said rates had fallen by up to 12% in some classes. It said rates were expected to continue to decline for the next two years.
But there was variation in the extent of rating decline between each class of business.
Marine, for instance, showed only modest softening. Willis Re said prices remained “steady” on large international accounts, although small accounts showed significant decreases.
In contrast, classes such as US property and motor liability saw rates plunge considerably.
There was also a disparities reported between the major reinsurance hubs. Willis Re said Bermuda had taken a more aggressive posture than London on property business.
