U.S. and U.K. renewals: a ‘tale of two markets’

January renewals in the U.S. and Europe are telling a “tale of two markets,” according to Grahame Millwater, the chairman and CEO of Willis Re.

In its Jan. 23, 2006 newsletter, A.M. Best notes “a few months after the record-breaking losses suffered from last year’s hurricanes, speculation has been rife in the property/casualty markets about the impact of all that destruction on reinsurance treaties in the January renewal season.”

From the vantage point of London, A.M. Best notes, “last year’s major hurricanes in the U.S. had a relatively subdued effect on reinsurance renewals.”

From the vantage point of the United States, however, Benfield Holdings is quoted as saying that “as anticipated, rates increased dramatically in the U.S.A., particularly for loss-affected areas.”

Guy Carpenter notes the U.S. property catastrophe market was “unsettled,” with “wide divergence between what insurers wanted to pay and what reinsurers were willing to accept.” According to A.M. Best, “pricing increases ranged from 10% to 100%, indicating ‘considerable disparity’ depending on the hurricane exposure and national-vs-regional accounts.”