Guy Carpenter & Company’s June renewal briefing has reported that the reinsurance sector has seen “dynamic capital growth” in 2012 and 2013, spurred by an influx of capital from alternative sources.
Guy Carpenter has found that the surge in alternative or convergence capital has changed the nature of the sector’s capital structure, as investors grow increasingly confortable with supplying capacity through a convergence of both traditional and alternative vehicles.
According to Guy Carpenter the capital growth has also begun to significantly impact reinsurance pricing for peak property catastrophe risks in the US.
David Flandro, global head of business intelligence at Guy Carpenter, said: “The reinsurance sector has exited the fairly consistent post-Katrina Florida property catastrophe pricing range.”
“This has been driven by a very real change to the sector’s capital structure and this change is continuing unabated. New sources of capapcity are emerging with implications for pricing, availability and structure. Guy Carpenter is well placed to enable clients to capitalise.”
