Is the reinsurance price-hiking party over before it evenbegan?

In advance of Jan. 1 renewals, reinsurers are already toningdown previously optimistic comments about the strength of expectedprice changes.

Now, some are saying that broad-based hikes aren't availableoutside U.S. borders, and that U.S. property-catastrophe jumps forsome business are less than anticipated.

Patrick Thiele, president and chief executive officer ofBermuda-based PartnerRe, was one of several executives who gave arevised assessment of the market Tuesday, during a seminar hostedby Morgan Stanley in New York, titled "The Bermuda Model: Can theExperiment Succeed?"

"Why did you have to spoil the party?" asked Marty Dolan, aninvestment banker from Morgan Stanley responding to Mr. Thiele'scomments.

Mr. Dolan and William Wilt, a Morgan Stanley analyst, questionedthe impetus for what Mr. Wilt described as "sobering comments"included in a PartnerRe press release last week and reiterated byMr. Thiele during a Tuesday Webcast seminar.

Mr. Thiele, referring back to market commentary released withPartnerRe's third-quarter earnings report in late October, said: "Ithink I even used the word optimistic" when describing favorablemarket conditions. At that time he predicted 20-to-45 percent hikesin U.S. windstorm prices, double-digit catastrophe price increaseselsewhere, and substantial jumps in other lines.

"Something has changed," he said, noting that he wasanticipating a better environment than the company is now seeingoutside the United States.

Mr. Thiele said that substantial price hikes are now confined tolines and markets directly impacted by the catastrophes of 2005,while competition is increasing in Asia, parts of Europe and inselected specialty lines.

While Chris O'Kane, CEO of Aspen Insurance Holdings, was wary ofpredicting the market direction--likening it to predicting theoutcome of a 90-minute football game 10 minutes after kickoff--hesaid the "early signs are a little disappointing in Europe and inU.S. regional business on the property side."

Noting that he would have predicted 10-to-20 percent increaseson European property renewals for business that wasn't impacted bylosses, he said such renewals now appear to be coming in no higherthan the low end--10 percent.

In the United States, he said, the renewals that have come up sofar are "the easy ones"--those with diversified insurance booksrather than predominately coastal risks. "Those have been put outwith modest increases--10-to-15 percent," he said.

"The early signs are not as good as I thought," he said. "But Idon't know if they're a reliable guide as to how the game will playout."

Noting, on the other hand, that he previously expected thatcasualty rates would fall, he said the decline has been halted. Hereported that Aspen had an increase in casualty reinsurance rateadequacy for the first time this year in October.

"It was a 1 percent increase, so don't get too excited," hesaid, underscoring, however, that it contrasted with minus-5-to-6percent in the earlier months of the year.