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Member, Beacon International Group, Ltd.
The international insurance market remains well-capitalized and “generally competitive” despite a run of natural disasters in the second quarter of the year, Marsh Inc. said in an analysis released Monday.
The report notes that second-quarter tornadoes and storms in the United States as well as other catastrophes around the world—coming on top of the Christchurch, New Zealand earthquake, the Japanese earthquake and tsunami, and other first-quarter catastrophes—have further depleted insurers’ catastrophe reserves.
Some capacity withdrawn
However, ample capacity remains even though there has been some withdrawal from areas affected by catastrophes, Marsh found in its second-quarter 2011 insurance market update.
“Accounts affected by losses, or with a significant proportion of catastrophe exposures, are experiencing tougher market conditions,” Marsh said in the analysis. Even accounts not affected by losses or with a “relatively small” catastrophe exposure are having a harder time getting rate reductions on renewal, according to the report.
Expectations for an active U.S. hurricane season, “combined with greater insurer discipline, increase the potential for a changing market dynamic through the balance of 2011,” according to the report.
Catastrophe-related losses helped drive the U.S. property/casualty industry’s net profit down 29.3% to $9 billion in the first quarter of this year compared with the same period last year, A.M. Best Co. Inc. said in a report released Wednesday.