Insurers dealt with approximately $7.1 billion in global insured catastrophe losses during the 2018 second quarter, well below the historical average, Morgan Stanley estimates in a new research note.

Typically, insurers face an average $14 billion in insured catastrophe losses in Q2, Morgan Stanley said.

So who suffered the biggest insured catastrophe losses during Q2? Morgan Stanley said primary insurers dealt with the bulk of the hit. Severe rain storms in the U.S. and Canada were to blame.

Beyond the lower catastrophe losses, Morgan Stanley said it is seeing an improvement in P/C pricing. U.S. primary P/C pricing saw low single digit increases in Q1, similar to Q 2017, and a bit ahead of the 2017 first quarter. Personal lines rates are also positive, Morgan Stanley said, with Q1 2018 rates up about 3 percent, versus 2 percent a year ago. Morgan Stanly predicts modest pricing increases through most commercial P/C lines in 2018, with personal auto rates under more pressure.

Property catastrophe reinsurance pricing, on the other hand, has been disappointing. Morgan Stanly said that June 1 renewals saw an average 1 percent increase, lower than expected. An abundance of alternative and traditional capital are to blame.

Source: Morgan Stanley