After a year of unprecedented natural catastrophe losses, the 2005-2006 reinsurance renewals season completed later than ever with some programs still not finished by their renewal date, according to Aon Re United Kingdom.
Aon Re UK said although this was one of the most difficult renewal seasons experienced, buyers were seeing high rate increases only for areas affected by U.S. wind exposure risks.
The reinsurance industry has proven to be remarkably resilient following 2005′s unprecedented series of losses, said Aon, with substantial new capital raised to meet increased demand.
Aon said that going into this year, reinsurer discipline, despite the influx of new capacity, will remain constant and rating levels applied throughout the renewal season will be maintained. Rates may firm slightly as reinsurers reach the limit of their aggregate capacity in peak zones, Aon added.
"It is very much a market characterized by a great divide between business with U.S. wind exposure and risk elsewhere," commented Charlie Cantlay, deputy chairman of Aon Re UK, in a statement.
Mr. Cantlay said, "Bullish predictions of 'across the board' rate increases on all lines of reinsurance in respect of product or domicile have not materialized, and major rate rises have been limited to U.S. property, marine and energy, and retrocessional business.
"The state of the reinsurance industry, at the time of the hurricane losses, was fundamentally more robust than the conditions that existed at the time of the 9/11 tragedy, and this, together with replenishment and new capital, is the major reason why increases have been so narrowly focused," he noted.
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