Capacity plentiful for June 1 reinsurance renewals: Guy Carpenter

A comparatively benign year so far for natural disasters has bolstered the capital levels of reinsurers, allowing for “moderate pricing trends” in mid-year reinsurance renewals, according to a recent report by reinsurance broker Guy Carpenter.

“Relatively light catastrophe loss activity during the first five months of the year contributed to positive reinsurer results and plentiful capacity,” Guy Carpenter noted in a briefing, Plentiful Capacity Sets the Stage for June 1 Renewals.

It estimates the global reinsurance sector’s capital position to be about $15 billion in excess of historical trends, given risks assumed. Insured losses during the first five months of 2012 were estimated to be around $6 billion, well below the $75 billion recorded during the same period of 2011.

“The reinsurance sector continues to function normally and, in the absence of a significant catastrophe loss burden, the improving capital position is likely to contain any attempt at price increases throughout the year,” said David Flandro, global head of business intelligence for Guy Carpenter.

The report examines Florida renewals, hurricane activity, property retrocession, property facultative and the industry loss warranty (ILS) market. Full details can be found here

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