A plethora of April 1 reinsurance market reports are out, all of which are worth a read. They point to pockets of rate hardening across the global reinsurance market and the ongoing influence of currency fluctuations and other factors on capacity:Ã‚
- Aon BenfieldÃ¢â‚¬â„¢s Reinsurance Market Outlook sees continued hardening for property catastrophe renewals in June and July where Florida risk is dominant. It notes that important decisions on Florida private market capacity await conclusions from the stateÃ¢â‚¬â„¢s legislature. Possible new legislation to reduce the state-run Florida Hurricane Catastrophe FundÃ¢â‚¬â„¢s (FHCF) potential $18.5 billion shortfall may slightly increase demand for private reinsurance for the 2009 hurricane season.Ã‚ Ã‚
- A new report from Willis Re says the reinsurance market stands out as the only capital market operating smoothly amid the financial downturn, with buyers able to access large quantities of contingent capital. However, increased reinsurance pricing is leading to greater focus on original policy terms and conditions as buyers and sellers try to match risk protection against expense constraints stemming from the global economic slowdown.Ã‚ Ã‚
- In its Reinsurance Market Outlook for 2009, Guy Carpenter describes the first half of 2009 as a waiting game, as cedents and markets examine major financial developments both inside and outside the industry. Dramatic events are possible and if catastrophe forecasts are met or exceeded, insured losses will mount. Ã¢â‚¬Å“Another September surprise could have devastating repercussions, but signs of an economic recovery and a mild catastrophe year could have the opposite effect.Ã¢â‚¬ Risk managers have only one alternative: manage to the extremes and heed the lessons of 2008.
Check out I.I.I. information on reinsurance.