Guy Carpenter: July 1 Re Renewals Display More Moderate Decline

July 9, 2015

July 1 reinsurance renewals show continued price declines, but the downward trend moderated, especially for U.S. wind-exposed programs, Guy Carpenter said in its latest briefing.

The Marsh & McLennan subsidiary pointed out that additional limit placed over the past few months helped stabilize price declines. Also contributing: higher demand for reinsurance and expansion of tailored coverage from previous seasons.

For the U.S. property market, capacity that was authorized but unused shrunk to 17 percent, versus 26 percent at July 2014. While this is an improvement, the number is still higher than the average of 15 percent from January 2011, Guy Carpenter said.

Some help came from continued light overall catastrophe loss activity, leading to 2015 losses that are largely limited so far to Northeast winter storms. As well, traditional reinsurers with robust remaining capacity as of July 1 dominated U.S. property per risk excess of loss placements, according to the report.

Lara Mowery, managing director and Guy Carpenter’s head of global property specialty, noted in prepared remarks that conditions have improved to the point that some reinsurers cited a lack of capacity in June and early July as a reason for cutting back on a program.

That’s not true for everyone, however. Mowery also said “there is certainly no capacity shortage overall and reinsurance capital has grown once gain.”

Here are some of Guy Carpenter’s July 1 renewal findings:

Source: Guy Carpenter