Traditional reinsures are no longer in the driver's seat settingU.S. catastrophe reinsurance rates as the capital markets continueto pour money into alternative vehicles and putting downwardpressure on rates, according reinsurance broker Guy Carpenter &Co.

In its latest review of the July 1 renewal season, GuyCarpenter says despite catastrophe losses of approximately $20billion for the first six months of this year, U.S. catastropheprograms witnessed “significant decreases” in pricing.

The effect, says David Flandro, global head of businessintelligence at Guy Carpenter, is property business in otherregions and across some casualty lines are experiencing downwardpressure as well. Without significant catastrophe losses, heexpects the trend to continue through the remainder of theyear.

Lara Mowery, global head of property specialty at Guy Carpentersays because of excess capacity, losses in the first half of theyear have not had the traditional impact on the second half. Thisforced the traditional markets to drop prices in order to remaincompetitive with the alternative financial vehicles, such ascatastrophe bonds, sidecars and collateralized reinsurance.

Among some of the renewal highlights for property insuranceprograms:

• Loss-free U.S. property catastrophe programs saw significantdecreases at July 1 renewals.

• Programs with losses saw more moderate decreases.

• U.S. property per risk pricing came under pressure.

• Global marine and energy lines reinsurance rates varied atJuly 1 renewal depending on territory and losses.

• Through July 1, there was $4.2 billion in property casualtycatastrophe bonds issued.

On the casualty side:

• U.S. primary casualty lines pricing improved as ratesincreased across some segments.

• Rates hardened on primary workers' compensation, but theimpact of low investment yields, reserve deficiencies and adversedevelopment, growth in residual market volume, and the impact ofthe Patient Protection and Affordable Care Act, plus the expirationof Terrorism Risk Insurance Program Reauthorization Act, remainunanswered.

• Primary insurance rates in umbrella and excess liabilitycontinued to increase depending on the exposure, size of theinsured and loss activity.

• Reinsurance and insurance for professional lines remaincompetitive except for some larger financial institutions.