RATES FELL BY 11% IN PROP-CAT RENEWALS, SAYS GUY CARPENTER

Reinsurance rates fell in nearly all classes and regions at the January 1 2014 renewals, claimed reinsurance broker Guy Carpenter on December 30. The Guy Carpenter Global Property Catastrophe Reinsurance Rate on-Line Index was off by 11% at the renewal, mainly because of a 15% decline in the US. There was also a 15% decline in the UK, and a 10% fall in continental Europe. Guy Carpenter said there had been risk-adjusted reductions of up to 20% in some cases. Guy Carpenter said that January 2014 was the first renewal in more than a decade where, with some "isolated" exceptions, all major territories had seen pricing move in the same direction. The exceptions included Germany and some parts of the Nordic region, where significant losses in 2013 had caused a rise in loss-affected catastrophe rates. Canada had also seen some increases in pricing, following two severe flood events in Alberta and Ontario. Lara Mowery, Guy Carpenter Global Head of Property Specialty, said that it was "difficult to think of another time in recent history where multiple factors have come together to support a market so focused on individual client need. There is tremendous innovation driving tailored solutions at reduced pricing to the benefit of our clients". Prices also fell in most non-property catastrophe segments, the broker claimed. Guy Carpenter reported "a general trend of decline", with casualty pricing generally flat to down, despite adverse development in US workers' compensation lines. The broker said that in the US prop-cat renewals a broadening of coverage terms was the norm. The broker said that, when there was a choice, cedants "most commonly sought an extension of hours clauses, improved reinstatement provisions and expanded coverage for terror exposures".