Canadian Underwriter
News

Cat losses not deterring reinsurance market slide: Benfield


January 19, 2005   by Canadian Underwriter


Print this page Share

Despite a record level of catastrophe losses in 2004, reinsurers appear to be giving in somewhat to soft market pressures, according to a review of 2004/2005 renewals by broker Benfield.
The report says that the most recent renewals saw increasing competition which pressured underwriters to reduce prices. “While 2004/5 renewals were orderly, there were signs that competitive pressures are increasing in some sectors,” says Benfield CEO Grahame Chilton. “And though an increased use of modeling and a sharper focus on return on equity continued to exert some discipline, more and more reinsurance underwriters were willing to undercut pricing to secure attractive business.”
Contributing to the competitive environment is the influx of capital into an already over-capitalized market, the report adds. This has results in softening specifically in the property catastrophe line, where European and U.S. cedants saw rates drop by as much as 10% (except in hurricane-affected areas, where carriers with cat losses saw rates jump as much as 20%). Stable rates were seen in casualty lines other than directors’ and officers’. Terms and conditions did remain tight, however.
Cost remains the key concern of buyers, a survey of brokers notes, followed closely by terms and conditions, while ratings were cited as a concern by only 9% and brokerage fees by just 2%. However, cedants were concerned about reinsurer credit quality more in casualty lines.


Print this page Share

Have your say:

Your email address will not be published. Required fields are marked *

*