Prices reduced at Jan 1 2010 renewals
Rate decreases, adjusted for changes in exposure, for the peak zones of U.S. hurricane and U.S. earthquake ranged from minus 5 to minus 15 percent, according to Aon Benfield.
Guy Carpenter’s World Catastrophe Rate on Line Index declined by 6 percent.
Strong reinsurance underwriting profits, a recovery in the global investment markets and a lack of premium growth for primary insurers were behind the softening.
Peter Hearn, CEO Willis Re said, "Despite global economic headwinds, the reinsurance industry has enjoyed one of its most profitable underwriting years for a number of years. This is due to the recovery on the asset side of reinsurers’ balance sheets in line with the strong performance of global markets in 2009. The position, however, is worse for reinsurers’ clients, where stagnant premium growth is pressuring expense ratios, particularly in mature markets. Reinsurers have listened to these concerns and responded sensibly with measured premium reductions."