The high watermark for property-catastrophe reinsurance pricing was midyear 2006, experts agree, predicting that prices won't reach those levels this year.
"There is still capacity for national business as well as all the regions," said Charles Hewitt, executive vice president in the Boston office of London-based Benfield Group. The tightest areas are the Northeast and Florida, but it looks like the equilibrium price point in those peak zones is about the April 1, 2006 level, he said.
Reinsurers want to preserve business they got in 2006, and not force it away, he said. By midyear--after catastrophe model changes came through from various vendors--the industry was "dealing with crisis pricing. The market had run out of capacity. Reinsurers were selling something they really didn't have." So there was essentially "an artificial jump" in prices between April and July, he said.
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