A busy US hurricane season could prove a tipping point in the insurance market, according to global insurance broker Marsh.Rates for property and catastrophe insurance in wind-exposed parts of the US have risen between five and 15 percent this year, according to Marsh’s second-quarter “Insurance Market Update”.Despite the huge catastrophe losses this year from the earthquakes in New Zealand and Japan, flooding in Australia, and tornadoes in the US, most re/insurers remain well capitalised, Marsh found.“Our view is that there has not been an overall change in market pricing and market fundamentals remain strong,” the report states.“However, expectations of an active US hurricane season, combined with greater insurer discipline, increase the potential for a changing market dynamic through the balance of 2011.”Insurers elsewhere in the world have reduced capacity for some business but not in Bermuda, Marsh reported.“While some London market insurers have withdrawn capacity for certain risks, there have been no reported reductions of catastrophe capacity by Bermuda-based insurers,” the report states. “As a result of this uneven response, insureds are increasingly looking to international markets to fulfill earthquake capacity requirements.”Many insurers and reinsurers had accounted for their anticipated annual catastrophe losses before the June 1 start of the hurricane season, Marsh noted.Renewal rates for areas affected by this year’s natural disasters have soared, with renewal rates for Japan earthquake risk up by 30 percent to 50 percent, while New Zealand earthquake rates were up between 10 and 30 percent.Property insurance programmes without a significant catastrophe exposure were seeing five percent rate reductions in the US, Marsh added, and up to a 15 percent reduction in Asia.“This relatively benign rate environment could change depending on the level of losses from the US hurricane season, which is predicted to be above normal in storm intensity and frequency,” the report adds.According to researchers at Colorado State University, this year is likely to see 16 named storms, compared to the average of 9.6, nine of them hurricanes and five of them major hurricanes.Even if no hurricanes make landfall in the US for a third successive year, Marsh does not expect insurance buyers to go back to demand hefty decreases in rates.“In the US, a benign wind season is unlikely to lead to a return to market-wide reductions, but rather to a continuance of erratic market behaviour through year-end,” Marsh states.“This is when insurers expect to incorporate into their cost structures the full effect of the introduction of the 11th version of RMS’s hurricane model (RMS 11), as well as catastrophe losses from the first half of 2011 and the anticipated impact of January 1, 2012, reinsurance treaty renewals.”The casualty insurance market is finally beginning to see small rate increases for many lines of business, Marsh reports, although it remains soft to flat in the US. In some lines, there have been substantial price hikes. In the energy sector, insurance buyers, particularly those with pipeline exposure, saw rate increases of up to 40 percent, while rises of up to 25 percent had also been seen in marine lines.Useful website:www.insurancemarketreport.com