Reinsurance rates at the April 1 renewals continued to rise due to 2011 loss events, according to a Guy Carpenter briefing released today.

Guy Carpenter says the April 1 renewals are “continuing the general trends observed at Jan. 1, 2012.”

The briefing notes that April 1 was a “significant renewal date” for the Asia-Pacific region, as it provides the first indication of how heavy catastrophe losses that hit the area have affected rates.

For Japan, Guy Carpenter says capacity was secured for risks, but at increased prices and with tightened terms and conditions in many lines. Rates were up in all property-catastrophe lines in Japan, while casualty lines “showed a mixed picture,” but with a general trend of modest increases.

Not surprisingly, earthquake coverage saw significant price increases in Japan, and Guy Carpenter notes that the average price of Japanese earthquake excess-of-loss capacity has practically doubled since the 2010 renewal.

Prices for Japanese windstorm coverage also rose despite a loss-free year for the market.

For Australia and New Zealand, Guy Carpenter notes that significant 2011 losses such as flooding in Australia and and a February earthquake in Christchurch, New Zealand occurred prior to the April 1, 2011-April 1, 2012 period. Still, Guy Carpenter says reinsurers “signaled a desire to move reinsurance pricing upwards again, consistent with their approach to the Jan. 1 renewals. This was particularly true for those April 1 renewals that had missed any significant corrective action on pricing in 2011.”

Loss-impacted programs in Australia and New Zealand saw double-digit rate increases, Guy Carpenter says.

In the U.S. property-catastrophe-reinsurance market, Guy Carpenter says quotes were generally in line with Jan. 1 renewals, ranging from down 12 percent to up 11 percent. But the briefing notes that the number of programs renewing in April is much smaller than that renewing in January.

Additionally, Guy Carpenter says rate increases were more pronounced for some programs that renewed early at this time last year, as they had received quotes from terms before the Japan earthquake and RMS v11 catastrophe model release were factored in. 

The briefing adds that programs seeking capacity beyond that which was expiring received greater pricing scrutiny. “In order to ensure sufficient capacity, therefore, some companies put out higher firm-order pricing than they may have otherwise,” Guy Carpenter explains. “Reinsurers continued to show more willingness to reduce support for programs significantly if pricing did not meet expectations.”  

Where pricing does meet expectations, though, Guy Carpenter says there continues to be sufficient capacity with reinsurers willing to provide substantial support.