Global Property Reinsurance Prices Fell
NU Online News Service, Sept. 20, 4:19 p.m. EDT?Pricing for catastrophe property reinsurance declined in most countries this year, Guy Carpenter & Company Inc., the reinsurance specialty firm,reported.[@@]
The finding was part of the firm's annual, comprehensive study of the property catastrophe reinsurance market, "The World Catastrophe Reinsurance Market: 2004."
The report covers more than 20 countries and regions estimated to comprise more than 90 percent of the worldwide market for catastrophe reinsurance.
Among the report's key findings:
? The pricing index of global rate on line fell by 8.7 percent from the peak of 2003. This decline follows an upward trend in pricing that began in 2000 and was accentuated by the enormous losses of Sept. 11, 2001.
? In general, reinsurers at 2004 renewals were competitive and aggressive in pursuing business that was perceived as adequately priced.
? The current price cycle in catastrophe reinsurance pricing appears to be less volatile than the price cycle following Hurricane Andrew in 1992, with more moderate rates of change in the hard phase and the soft phase of the cycle thus far.
? Looking ahead to 2005 renewals, the current market expectation is for further rate declines and adequate capacity in most markets. This projection assumes there are no mega-catastrophic events in the second half of 2004.
Sean Mooney, Guy Carpenter's chief economist, noted in a statement that "both supply and demand expanded in 2004, but as increasing supply surpassed rising demand, prices fell."
Mr. Mooney also noted that the overall cost of catastrophes in 2003 was about average when compared to the losses over the past 15 years.
"As a result, catastrophe losses did not play a major role in the pricing of 2004 renewals in most markets," he said.
Though the report was completed before Hurricane Frances made landfall in Florida, recent Atlantic hurricane activity, excluding any potential losses from Hurricane Ivan, is not expected to have a meaningful impact on the January 2005 renewal season, with the exception of some isolated cases, Guy Carpenter said.
The World Catastrophe Reinsurance Market: 2004 is available on the Guy Carpenter website, www.guycarp.com. Printed copies may be obtained by sending a request to [email protected]. The firm is part of the Marsh & McLennan Companies Inc.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.