Requests for broader coverage accompany price reductions at renewals

Jamie Wakeling, divisional underwriter, property treaty, Canopius

While US renewals at the beginning of 2014 were characterised by rate falls of between 10% to 15%, renewals in the second quarter saw further rate reductions of 15% to 20%. This latest round of extreme reductions has further depleted margins and, while it is still possible to underwrite profitably, it has just become that much tougher. It is however a hallmark of a soft market cycle that when prices seem to be getting as low as they can for subscription-based reinsurance programmes, there are further downward lurches. Right now there seems to be a race to the bottom and opportunities to agree terms that still make sense at current rates are much harder to come by.