International

Premiums depressed at mid-year renewal

Excess capital depressed premium levels at July’s property and casualty reinsurance renewals, commented reinsurance broker Guy Carpenter. Risk-adjusted pricing was down by 10% to 20% from July 2007 levels. The weakening global economy has also squeezed insurance and reinsurance markets. As corporate profitability dipped worldwide, it has put pressure on expenses, including the cost of insurance and reinsurance premiums. Loss history influenced reinsurance programmes in markets outside the US. Prices dropped less than elsewhere in Australia because small catastrophes have become more frequent. In Caribbean markets, programmes were oversubscribed as reinsurers scrambled for revenue. There were few changes in overall terms and conditions, and retentions as well as limits were generally stable. In the US, terror risk rates continued to decline, particularly for retentions under the TRIA program (which has a $100mn event trigger). For casualty lines, the reinsurance market was showing more discipline than the primary market, concluded the broker.