GUY CAR­PEN­TER: JULY 1 RE­NEWALS IN­DI­CATE DOWN­WARD PRES­SURE ON REIN­SUR­ANCE RATES LIKELY TO CON­TINUE THROUGH 2013

Insurance - - INDUSTRY UPDATES -

Source: Guy Car­pen­ter Press Re­lease, 9 July 2013 IN spite of catas­tro­phe losses reach­ing ap­prox­i­mately USD20 bil­lion dur­ing the first six months of 2013 (above the ten-year av­er­age for the pe­riod), Guy Car­pen­ter & Com­pany re­ported that rein­sur­ance mar­ket rates on line (ROLs) con­tin­ued to be driven by an in­flux of cap­i­tal from third-party in­vestors at the July 1 re­newals. Guy Car­pen­ter com­mented that ro­bust catas­tro­phe bond, side­car and col­lat­er­alised rein­sur­ance ac­tiv­ity through­out the year has for the first time pushed pric­ing in the cap­i­tal mar­kets to “de­cou­ple” or break­away from lev­els set by the tra­di­tional mar­ket. This has in turn prompted down­ward pres­sure on over­all tra­di­tional mar­ket pric­ing. Ac­cord­ing to the re­port, con­ver­gence cap­i­tal now ac­counts for an es­ti­mated USD45 bil­lion of the global prop­erty catas­tro­phe limit, or ap­prox­i­mately 14 per­cent of the mar­ket. The amount of ex­cess cap­i­tal in the mar­ket helped mit­i­gate the im­pact of catas­tro­phe losses re­sult­ing from se­vere tor­nado ac­tiv­ity in the United States and floods in parts of Europe, In­dia and Canada dur­ing the sec­ond quar­ter of 2013. David Flan­dro, Global Head of Busi­ness In­tel­li­gence at Guy Car­pen­ter pointed out that with­out fur­ther sig­nif­i­cant catas­tro­phe losses in the re­main­der of 2013; it ex­pected that the down­ward pric­ing trend will likely con­tinue through the re­main­der of the year and into 1 Jan­uary 2014 re­newals.

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.