Global risk and reinsurance specialist Guy Carpenter & Company has released its 2013 global renewal report, The Route to Profitable Growth, displaying that the reinsurance sector enters this year with ample capital and stable pricing.
Guy Carpenter reports that only loss-affected lines and select regions have experienced price volatility. The reinsurance market was supported by lower than normal catastrophe losses during the first nine months of 2012, new reinsurance capacity and record-high levels of capital.
The Guy Carpenter Global Property Catastrophe Reinsurance Rate on Line index fell marginally at the 1 January renewals, indicating a global market with capacity appropriate to meet demand.
Upwards pressure on property catastrophe pricing mostly came from programmes impacted by Superstorm Sandy and smaller local events, according to the report.
Price movements for non-catastrophe lines were also mixed, with marine and energy lines seeing noticeable rate increases, while many other lines experienced reductions.
Guy Carpenter also identified six key areas that carriers can explore to help enhance profitability in the future. These include optimal capital management, clear and consistent communication to rating agencies and regulators, appropriate domicile selection and capital market opportunities.
Lara Mowery, global head of property specialty at Guy Carpenter, said: “The 1 January, 2013 renewal was very orderly as catastrophes had only local impact.”
“One area of ongoing development was growth in the number of participants and capital provided by non-traditional markets, a critical factor in the marketplace’s continuing evolution. Even insurers who do not directly utilise non-traditional sources benefit as reinsurers further leverage this capacity.”
