GUY CARPENTER: 2013 RENEWALS BRING STABLE REINSURANCE PRICING
Source: Guy Carpenter Press Release, 3 January 2013
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)