While the U.S. reinsurance market for hurricane-exposed programs continued to harden, renewals of catastrophe-exposed programs outside of the United States remained firm, and were influenced by regional loss experience and reinsurer competition to participate in regional programs. This comes from
In Australia, property catastrophe pricing increased by 10% to 15% overall, and by 5% to 10% on loss-free layers, as a result of large losses arising from the Queensland storms in 2008, and the Victoria bushfires earlier this year. Conversely, in Malaysia, property excess of loss rates decreased by 5% to 15% overall due to increased capacity and competition.
While July 1 remains a significant renewal date in the United States, the hardening that was expected caused many programs to be marketed and placed prior to July 1. Pricing changed at a level consistent with June 1 renewals—increasing 10% to 15%.
“The July 1 renewals continued to reflect the hardening of rates for programs that include U.S. hurricane risk,” says Bryon Ehrhart, CEO of Aon Benfield Analytics. “Other major catastrophe aggregate zones held firm or increased slightly reflecting the limited opportunity to improve upon already accretive economic terms held by most cedents. Reinsurers have generally done a superior job of managing capital through these turbulent times and have continued to renew the core capacity required by our clients.”
In the Asian market, excluding China and Japan, there were no major changes in coverage, exclusions and conditions in property catastrophe lines. Whereas in the UK, rate increases of up to 5% were recorded in property catastrophe lines.
Meanwhile, in Latin America, property excess of loss prices rose by up to 5%, with broadly stable terms and conditions and higher levels of retention in certain programs.
