January 10, 2005
New Report Finds the U.S. Reinsurance Market Flat to Slightly Down
Guy Carpenter & Company, Inc., the world's leading risk and reinsurance specialist and a part of the Marsh & McLennan Companies, Inc., has released its annual report on pricing at renewals, U.S. Reinsurance Renewals at January 1, 2005, which found pricing generally to be flat to slightly down.
The renewals report highlights pricing, retention, limits and capacity within areas such as property catastrophe, workers compensation, medical professional liability, D&O liability, U.S. ocean marine and more. The report also noted the continuing trend toward pricing that is based on modeling results, leading to less volatility in pricing and greater discussion of terms and conditions.
"The reinsurance market was firmer than we originally anticipated," said Sean Mooney, Guy Carpenter's Chief Economist. "Given the frequency of hurricanes in Florida, as well as the record number of typhoons in Japan, we found that the marketplace was more cautious and somewhat less competitive than expected."
Among the report's major findings:
- A notable exception to the general pricing trend was D&O liability, as some major players exited the line and many reinsurers had doubts concerning the adequacy of underlying primary pricing
- Key issues influencing the property and workers compensation markets included the possible sunset of the Terrorism Risk and Insurance Act
- In the workers compensation line, abundant capacity continues to exist for catastrophe business, however, pricing remained firm on lower layers
- Cedents continue to examine and tighten their reinsurers' financial security requirements
Copies of the report, U.S. Reinsurance Renewals at January 1, 2005, are available for download at www.guycarp.com.
Guy Carpenter & Company, Inc. is the world's leading risk and reinsurance specialist and a part of the Marsh & McLennan Companies, Inc. Guy Carpenter creates and executes reinsurance and risk management solutions for clients worldwide through more than 2,400 professionals across the globe. The firm's full breadth of services includes 16 centers of excellence in Accident & Health, Agriculture, Alternative Risk Transfer, Environmental, General Casualty, Investment Banking*, Life & Annuity, Marine and Energy, Professional Liability, Program Manager Solutions, Property, Retrocessional, Structured Risk, Surety, Terror Risk, and Workers Compensation. In addition, Guy Carpenter's Instrat® unit utilizes industry-leading quantitative skills and modeling tools that optimize the reinsurance decision-making process and help make the firm's clients more successful. Guy Carpenter's website address is www.guycarp.com.
Securities are offered in the United States through MMC Securities Corp., Member NASD/SIPC. MMC Securities Corp. is an affiliate of Guy Carpenter & Company, Inc.
Posted by Tom Troceen