Property-catastrophe reinsurance prices saw their steepest annual decline in at least 25 years at the midyear renewals as ample capacity put pressure on a market important to Bermuda’s reinsurance sector.

Marsh McLennan said Guy Carpenter’s global property-catastrophe rate-on-line index fell 16 per cent year-on-year at the June and July renewals, up from a 12 per cent decline at January 1.

Dean Klisura, president and chief executive of Guy Carpenter, told analysts in a call this week that it was “steepest year-over-year decline we’ve observed since the index was created 25 years ago”.

The decline reflects a soft market where growing reinsurer appetite and much capital have left capacity outstripping demand.

Rates for Florida catastrophe coverage fell between 15 and 20 per cent at the June 1 renewals, Marsh said.

Lower reinsurance pricing, particularly in property lines, reduced Guy Carpenter’s underlying revenue growth by about six percentage points during the second quarter. The reinsurance broker’s revenue fell 2 per cent, while underlying revenue for the first half was flat.

Mr Klisura said property catastrophe business represented about half of Guy Carpenter’s global portfolio, leaving the company exposed to declining prices.

The downturn comes despite strong demand for alternative reinsurance capital, a major part of Bermuda’s insurance-linked securities market.

More than $61 billion of catastrophe-bond limit was outstanding at the end of the first half of the year. Guy Carpenter led 20 cat-bond issuances providing $5 billion of coverage during the period, which the company said was a record.

It also reported double-digit growth in structured transactions, sidecars and other capital arrangements.

Softening was also seen in the wider commercial insurance market. Global commercial insurance rates fell 6 per cent, led by a 12 per cent decline in property rates.

Financial and professional liability rates fell 3 per cent and cyber rates declined 4 per cent. Casualty was the exception, rising 2 per cent globally, while rates for US excess casualty increased 15 per cent amid higher claims costs.