Capital returns to reinsurance market encouraged by absence of major losses during first two quarters of 2008

Despite predictions of dramatic rate increases to offset reinsurer losses over the preceding 12 months, the July renewals revealed sufficient capacity in virtually all areas and a reasonably orderly rating environment

Fresh capital is starting to reappear in the global reinsurance market according to broker, Willis. A new report issued by Willis Re, the group’s reinsurance broking arm, comments on developments in the Insurance Linked Securities market. The latter is showing signs of life with $1.4 billion in catastrophe bonds being issued so far in 2009, along with a modest reappearance of sidecars and some capital increases. However, prices for new capital are still very high, owing largely to the constraints on the debt markets, but the report said “encouraging” appetite still exists for new risk structures.