Sufficient capacity in July 1 renewals

The July 1, 2009 reinsurance renewals saw sufficient capacity in all areas, according to several broker overviews.
This was despite predictions of dramatic rate increases to offset reinsurer losses over the preceding 12 months, according to Willis Re.
Consistent with the general trend seen in the United States from January to June, and in line with prior renewals in 2009, U.S. national program rates rose 15% year over year at the July 1 renewal, Guy Carpenter & Company, LLC reported.
Greater stability in the reinsurance market was brought about by initial signs of recovery in the financial markets and a lack of major underwriting losses in the first two quarters of 2009, according to Willis Re’s 1st View: Capital Secured.
Reinsurers took aggressive steps early in the year to control their aggregates due to anticipation over a challenging year marked by exchange rate volatility and a difficult retrocession market, the report added.
According to Aon Benfield, the hardening that was expected caused many programs to be marketed and placed prior to July 1.
U.S. pricing increased 10-15%, according to Aon Benfield.
“The July 1 renewals continued to reflect the hardening of rates for programs that include U.S. hurricane risk,” Bryon Ehrhart, CEO of Aon Benfield Analytics, said in a release. “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.”