Brokers reflect on renewals

One broker takes the view that the insurance cycle will be less destructive than in the past because reinsurers are now more disciplined. Another believes that, despite the many statements about the importance of cycle management, the industry is showing signs of reverting to its historic pattern of feast or famine

Three of the major reinsurance brokers – Benfield, Guy Carpenter and Willis – have published their impressions of the January renewals, all of them indicating a general softening of rates. Benfield says that “buoyant profits and strong balance sheets dictated the direction of rates at the 2008 renewal and falls of more than 10% were not uncommon in all territories apart from the UK” while according to Guy Carpenter: “Cedants took advantage of a buyer’s market. Many 2008 renewals closed late as cedants held out for lower rates in the continuing soft market. Reinsurers were rewarded not only with lower rates, but often smaller lines.”