Pressure is building for an increase in reinsurance rates after massive catastrophe losses this year have substantially diminished reinsurers’ capital.That is the conclusion of a report by rating agency AM Best, which states that companies “are hoping for, but not betting on, a more dramatic improvement in property catastrophe pricing at the January 2012 renewal season” than the limited increases already seen.Analysis in Best’s Global Reinsurance Market Review, headlined “Reinsurers are ready to move as the market begins to stir” also included rankings that put 15 Bermuda-based companies in the world’s top 50 reinsurers by gross premiums written (GPW).Ninth-placed PartnerRe was the highest ranked local company with $4.88 billion in GPW in 2010, one place ahead of Everest Re, which posted $4.2 billion.Axis Capital Holdings placed 23rd with $1.83 billion, while Catlin Group, RenaissanceRe, Aspen Insurance Holdings, Validus Holdings and White Mountains Insurance Group all wrote more than $1 billion in reinsurance business last year.Other major operators in the Bermuda market, though not based on the Island, who featured in the list included XL Group (20th place with $2.25 billion), Ace (30th place with $1.15 billion and Flagstone Re (32nd with $1.1 billion).The report points out that first-half insured catastrophe losses were around $60 billion, according to Munich Re. “The effects of natural disasters around the world have inched closer to reinsurers’ balance sheets, and this in turn has started to move pricing out of the doldrums at least on property catastrophe risks.”Several Europe-based executives of Bermuda re/insurers, quoted by Bloomberg News, feel price rises are due.“The first part of the year was very active with natural catastrophes,” said Jacopo D’Antonio, president and chief underwriting officer at Aspen Re Europe. “At the same time, the low-interest-rate environment seems to continue. We and our clients have to realize we have to end this denial of price adequacy.”Hans-Joachim Guenther, chief underwriting officer and head of reinsurance for Europe and Asia at Bermuda-based Endurance Specialty Holdings, said: “Prices are not adequate anymore. I would expect the turning point to happen. However, it is a very softish growth in pricing, so it’s at an early stage, but at least it goes in the right direction.”Karl Mayr, CEO and president of the European reinsurance unit of Axis Capital, said: “There is a much better opportunity this year to make our point that we need price increases. It’s a modest increase that we can get and that we will get in large parts of the business in the renewals in January.”Peter Schmidt, head of European reinsurance at Catlin Group, had modest expectations. “For January, my expectation would be a bottom out and slow start but that there would be an agreement that we won’t see double digits,” Mr Scmidt said.On the question of reinsurance domiciles, AM Best says that “Bermuda remains hard to beat as a tax-advantaged home base, but companies based there face a recurring threat from US authorities seeking to capture taxes before revenue earned in the United States goes offshore”.The report adds that there is no viable legislation in Congress to advance Congressman Richard Neal’s proposal to raise more US tax from affiliated reinsurance business, but “supporters believe the current fiscal squeeze in Washington may offer the best opportunity for the measure to gain significant backing”.Best notes that Switzerland, which has lured Ace and Allied World Assurance Company among others in recent years, has made headway in attracting insurers. The Swiss have a settled regulatory reputation and is “tax-advantaged but not to the same extent as other domiciles that draw negative attention as ‘tax havens’.”The report says that Solvency II, the name given to new rules for insurers being introduced in the European Union in 2013, was a concern for reinsurers everywhere.“With talk that Solvency II capital requirements may not take full effect until 2014, the only consistent aspect of the issue seems to be uncertainty,” adds the report.The phase-in of Solvency II is seen as “healthy pragmatism” Best adds and will give players within and outside the EU more time tom prepare.Among the issues reinsurers have faced in preparing for Solvency II are shortages of skilled modellers; documenting of modelling and enterprise risk management processes; and significant implementation details to be worked out, such as group risk, premium provision and risk margins.