Most Reinsurance Prices Unchanged, Study Finds
NU Online News Service, Jan. 11, 11:30 a.m. EDT?Reinsurance pricing has generally stayed flat at the Jan. 1 renewal date, according to a report published by Guy Carpenter & Company brokerage.[@@]
The New York-based firm also noted a trend toward pricing based on modeling results, which it said is leading to less volatility in pricing, and greater discussion of terms and conditions.
Sean Mooney, Guy Carpenter's chief economist, said the market was actually firmer than the company anticipated.
"Given the frequency of hurricanes in Florida, as well as the record number of typhoons in Japan, we found that the marketplace was more cautious and somewhat less competitive than expected."
The report found that one major exception to the pricing trend was directors and officers liability, as some major players exited the line, and many reinsurers had doubts concerning the adequacy of underlying primary pricing.
In addition, cedents continued to examine and tighten their reinsurers' financial security requirements. In the workers' compensation line, abundant capacity continued to exist for the catastrophe business. But pricing remained firm on the lower levels, Guy Carpenter said.
The firm noted that another key influence on the property and workers' comp lines was the possible failure to extend the Terrorism Risk and Insurance Act.
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