Willis Group Holdings announced from its London office that it has released its reinsurance review of the marketplace for the July 1, 2007 renewals entitled “Willis Re – 1st View.”
Willis said the report covers the major classes of business and features the following “key findings:”
— The four major factors identified in April–favorable 2006 financial results, continued capital infusion, diversifying reinsurer appetites and the populist movement in the United States–continue to depress reinsurance property pricing and in turn increase competition for other lines of business.
— A fifth factor is emerging this July renewal cycle. Insurers are being squeezed and are buying less reinsurance and as a consequence, there is less premium in the market. Reinsurers are competing aggressively for the remaining more volatile business.
— July 1 reinsurance pricing, depending on the insurers’ specific experience, remained flat or fell, in some cases significantly.
— The capital markets are emerging as increasingly viable competitors to traditional reinsurers.
— In North America, reinsurers contend with price competition, capital market competition, government-sponsored reinsurance vehicles (Florida’s Hurricane Catastrophe Fund), and the explosion of residual markets (“Fair Plans”).
Willis CEO Peter Hearn commented: “The reinsurance industry is undergoing seminal change and includes a variety of constituents such as the capital markets, local governments, residual markets and self insurance. We welcome these changes and continue to provide consultative advice to help our clients identify, quantify and spread their risk.”
The full report is available at http://www.willis.com/news/Publications/WillisRe_1stView_07012007.pdf