The high watermark for property-catastrophe reinsurance pricingwas midyear 2006, experts agree, predicting that prices won't reachthose levels this year.

"There is still capacity for national business as well as allthe regions," said Charles Hewitt, executive vice president in theBoston office of London-based Benfield Group. The tightest areasare the Northeast and Florida, but it looks like the equilibriumprice point in those peak zones is about the April 1, 2006 level,he said.

Reinsurers want to preserve business they got in 2006, and notforce it away, he said. By midyear--after catastrophe model changescame through from various vendors--the industry was "dealing withcrisis pricing. The market had run out of capacity. Reinsurers wereselling something they really didn't have." So there wasessentially "an artificial jump" in prices between April and July,he said.

In June and July 2006, 100 percent price hikes in property-catreinsurance rates were widely reported.

Mr. Hewitt stressed that he doesn't believe covers coming up inApril and May will see lower prices than last year. "I think we'llprobably see reinsurers try to push the prices up a little....TheApril 1's are really going to tell us where the equilibrium is. Butthat's really what we're pushing for [April 1, 2006 price levels]as being the stability point."

Timothy Gardner, global leader of property at Guy Carpenter inNew York, said he expects a flat or softening market later thisyear.

Noting that Jan. 1, 2007 cat reinsurance prices did not come upto July 1, 2006 levels, Mr. Gardner said some softening could comethrough in the July 2007 pricing "to get it to that paritylevel"--in other words, "to bring it back to January."

On average, Mr. Gardner said that Jan. 1 property-catreinsurance prices for national accounts rose in the 20-to-50percent range, while single- or multistate regional insurers sawtheir reinsurance bills rise in the 5-to-35 percent range.

Even if prices start to come off a little bit at midyear, "Ithink the moves will be minor," he said, as reinsurers move back tounderwriting as usual. "They're asking, 'What managements do Ilike? Who's been able to demonstrate that they are executing onexposure management strategies?' Those are the people I'm going toback regardless of where they come up through the course of theyear."

Separately, at the Property-Casualty Insurance Joint IndustryForum in New York yesterday, just under two-thirds of executivespolled--64 percent--said they expect property-cat reinsurancepricing to ease in 2007.