Reinsurance prices falling more slowly
Reinsurance prices declined in the July 1 renewals, but at a moderating rate.
That is the finding of Guy Carpenter & Company in its latest briefing on renewal pricing. It noted that the moderating declines were especially seen in programmes covering US wind storm risk.
The company, a global risk and reinsurance specialist, said that overall pricing was down across virtually all geographies and lines of business, but “additional limit placed over the past few months is partially responsible for the stabilisation of price declines, particularly for US property”.
Guy Carpenter also noted growth in demand for worldwide property catastrophe coverage.
“It was hard to imagine based on the two previous years that we would hear a reinsurer reference lack of capacity as a reason for cutting back on a programme, but this did occur at times this June and July,” said Lara Mowery, managing director and head of global property specialty for Guy Carpenter.
“There is certainly no capacity shortage overall and reinsurance capital has grown once again. However, the combination of a significant increase in limit purchased and margins that have continued to thin, created a dampening on the market’s response to additional rate pressure, particularly with regard to US wind.”
Guy Carpenter said analysis shows demand for worldwide property catastrophe coverage is up around 8 per cent since spring 2014. It said this rise is primarily due to new entities buying coverage and some companies using savings to enhance their coverage.