State of the Reinsurance Market

Global reinsurers view U.S. catastrophe risk as an essential component of their diverse assumed risk portfolios. The important role reinsurance plays in our nation’s economy and the resiliency of reinsurers is demonstrated by the 2008 market which features plentiful capital and competitive pricing despite historic losses in 2004 and 2005 followed by catastrophe modeling and rating agency dynamics which impacted the reinsurance market in 2006.

Based on the January 1, 2008 reinsurance renewals, brokers report supply now exceeds demand, competition is working and, on average US national rates are down by 10% and US regional programs are down by 12%. For further details, please review the complete reports listed below.

With the April 1st renewals, brokers report a continuation of the pricing decreases seen in January. Catastrophe risk is reportedly the most competitive sector within the US property reinsurance market with price decreases in the range of 20 percent.