Guy Carpenter & Company Inc., part of the Marsh & McLennan Companies, has released its annual report on pricing at renewals, U.S. Reinsurance Renewals at Jan. 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 Jan. 1, 2005, are available for download at www.guycarp.com.
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