Willis has warned that the failure of reinsurers to provide shareholders with good returns in 2003 could lead to a reduction in choice for customers.
In its latest report on the reinsurance sector Willis pointed out that the market is 'returning to some balance' following the hardening of rates in recent years.
Capacity in short-tail classes was influenced by good results in the 2002 underwriting year, it said.
For property catastrophe risks, Willis said that increased capacity has limited further price increases.
The report also warned that long tail classes remain difficult to place, with increasing pressure on rates. The report blamed the situation on poor underwriting years and modest investment yields.
