MOST REINSURERS AVOID CAPITAL IMPACT FROM SANDY, SAYS WILLIS

Natural catastrophe losses from 2012 are likely to be about half the $120bn faced by the insurance industry in 2011, despite the late-year impact of Superstorm Sandy, and most reinsurers are within their natural catastrophe budgets for 2012, reports broker Willis in its "1st View" of the January 1 2013 renewals. The broker said that this had "resulted in a stabilization of rates on Property classes", with "no signs of attempts at blanket rate increases". However, Willis noted that Marine and UK Motor had "faced very difficult and late renewals" – driven by loss activity and capacity withdrawal. In longer-tail classes Willis said that the frequency and severity of losses continued to decline, with insurers continuing to retain more risk on their own books."Concerns over reserving adequacy, investment returns and the ability to deliver further reserve releases remain unabated and the potential fallout of the LIBOR scandal is a growing concern for reinsurers writing financial lines", said Willis.