GuyCarp: U.S. property/cat rates flat

Guy Carpenter gives us another sign the soft market may be ending: U.S. 4/1 reinsurance renewals are flat.

GC points to the new version of RMS, which increased the threat of inland hurricanes. That makes it tougher for programs to balance, say, inland Florida risks against a portfolio of coastal exposures.

Add to that the YTD losses from Japan, New Zealand, Australia and there was enough uncertainty in the market to stiffen the spines of reinsurers.

Perhaps most notable:

Programs that were out early at terms measuring any notable price decrease were not supported .  .  . a significant number of programs were repriced .  .  .  . Reisurers were more willing to significantly cut back on their support of a program if pricing did not meet expectations.

But Carpenter isn’t calling the hard market, since it looks like there’s still a lot of capacity in the market:

The degree to which capacity is impacted by recent events ultimately will play a substantial role in the market’s position in the coming months. To this point, the April 1 renewals provided no indication that there is currently a capacity issue for U.S. catastrophe placements, as reinsurers continued to provide substantial authorizations.



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