October 20, 2010 by Canadian Underwriter
Catastrophe reinsurance prices in the US have continued to soften, despite heavy losses so far in 2010, reports Guy Carpenter.
The trend is also true on a global level, save for a few local areas like Chile, that experienced catastrophic events, it adds.
The decline in prices vary by region, exposures and loss history, but generally within the range of 6% and 15%, Guy Carpenter said in its ‘Capital Ideas.’
Risk-adjusted catastrophe prices in the US fell by an average of 8% through 2010. Factoring in modelling adjustments, rates declined by 12% on average.
Catastrophe rates have dropped to levels last seen in 2008, as improved investment returns and low catastrophe losses in 2009 bolstered reinsurer’s balance sheets and exerted gradual downward pressure on prices.
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