Aon Benfield has released its latest Reinsurance Market Outlook report, which provides an overview of the trends witnessed at the 1st April reinsurance renewals.
The intermediary reveals that despite “a string of meaningful insurance events” and associated adjustments in pricing, the decline in US and European property catastrophe rates continues.
Few European programmes renew at 1st April but with regard to the US, the season saw property catastrophe rates for programmes including hurricane risks decrease by 5% to 10%.
Furthermore, the broker is predicting that the June and July renewals period will find price changes of flat to down 5%, for US hurricane-driven programmes.
The Japanese earthquake on 11th March did affect the renewals process, as many insurers opted to extend current programmes while losses were being assessed.
Where Japanese renewals took place, the costs of typhoon programmes increased by 5% to 10%, while most earthquake programmes increased within a range of 25% to 50%.
Aon Benfield Analytics chairman, Bryon Ehrhart, sums up: “The reinsurance market remains functional with its existing capital base, and we do not anticipate the need for material new capital flows into the reinsurance market to satisfy insurer demand for catastrophe reinsurance based upon the global events to date.”
He adds: “Throughout the recent, significant global events, reinsurance responded to the needs of global and regional insurers as intended, with material volatility shifted to reinsurers from the balance sheets and income statements of global and regional insurers.”
Also of note, reinsurance programmes covering New Zealand, where a second major earthquake struck Christchurch in February, do not renew at 1st April.
Last month, Aon Benfield formed a Market Analysis team within Aon Benfield Analytics in a move aimed at allowing Aon Benfield Research to focus entirely on academic and industry collaboration.
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