GUY CAR­PEN­TER: 2013 RE­NEWALS BRING STA­BLE REIN­SUR­ANCE PRIC­ING

Source: Guy Car­pen­ter Press Re­lease, 3 Jan­uary 2013

Insurance - - INDUSTRY UPDATES -

Ac­cord­ing to Guy Car­pen­ter, the rein­sur­ance sec­tor en­ters 2013 equipped with am­ple ded­i­cated cap­i­tal and sta­ble pric­ing. In its 2013 global re­newal report, The Route to Prof­itable Growth, Guy Car­pen­ter finds that the Jan­uary 1, 2013 re­newals took place against a sta­ble back­drop with only loss-af­fected lines and se­lect re­gions ex­pe­ri­enc­ing price volatil­ity. The mar­ket was sup­ported by a com­bi­na­tion of fac­tors in­clud­ing lower than nor­mal catas­tro­phe losses dur­ing the first nine months of 2012, new rein­sur­ance ca­pac­ity and record-high lev­els of cap­i­tal. At the Jan­uary 1 re­newals, the Guy Car­pen­ter Global Prop­erty Catas­tro­phe Rein­sur­ance Rate on Line (ROL) in­dex fell marginally in­di­cat­ing a global mar­ket with ca­pac­ity ap­pro­pri­ate to meet de­mand. Any up­wards pres­sure on prop­erty catas­tro­phe pric­ing gen­er­ally came from pro­grammes im­pacted by Su­per­storm Sandy in the US and other smaller, lo­cal events. Pro­grammes not loss im­pacted were over­all flat to down. Price move­ments for non-catas­tro­phe lines were also mixed, with marine and en­ergy lines see­ing no­tice­able rate in­creases while many other lines ex­pe­ri­enced re­duc­tions. Fully ded­i­cated rein­sur­ance cap­i­tal rose to record lev­els dur­ing the first nine months of 2012. Although Sandy’s late land­fall along the north­east US coast­line pushed global in­sured losses to more than USD50 bil­lion (MYR151.85 bil­lion) in 2012 and likely caused cap­i­tal lev­els to stag­nate in the fourth quar­ter, losses were sig­nif­i­cantly less than the USD120 bil­lion (MYR364.44 bil­lion) sus­tained in 2011.

(US$1.00 = MYR3.04)

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