REINSURANCE RATES DOWN 6% AT RENEWALS, SAYS GUY CARPENTER

A swift recovery in the capitalization of the reinsurance sector, helped by a generally benign 2009 and a fall-off in demand because of the recession, were factors in a 6% fall in the Guy Carpenter World Catastrophe Rate on Line Index, the reinsurance broker said today. The broker reported that there had been a slow renewal "in which many contracts closed very late in the season". Catastrophe pricing in Continental Europe was flat to 5% down. However, in France the impact of Windstorm Klaus in January last year led to 10% average price rises for impacted programmes. Similarly in Austria — hit by hailstorms — prices rose by between 20% and 30% after four years of losses. UK property catastrophe rates were down 5% to 10%. Guy Carpenter noted that "the UK remains attractive to reinsurers because of its profitability over time". Prices in the underlying retrocession market were down 5% to 7.5%. Motor liability reinsurance rates in Europe were flat to plus 10% on working excess layers. Aviation risk rates were "essentially flat", while overall marine rates were down by 5%. "Competitive conditions and price-cutting were widespread, particularly for non-Gulf of Mexico business", said Guy Carpenter, predicting that "in the absence of significant losses, downward pressure in the marine sector is expected to continue into 2010".