MONTE CARLO, Monaco — Barring any major catastrophe losses, reinsurance rates likely will stabilize at the Jan. 1, 2014, renewals, according to executives from two of the world's largest reinsurers.
During briefings at the Rendez-Vous de Septembre reinsurance meeting in Monte Carlo, Monaco, Monday, the CEOs of Hannover Re S.E. and Swiss Re Ltd. said they expected the renewals to be stable.
While rates for property catastrophe coverage in Florida at the midyear renewals were down by between 15% and 20% on average, fueled in part by an influx of third party capital, the market likely will remain disciplined and the renewal at Jan. 1 likely will be stable, said Ulrich Wallin, CEO of Hannover Re.
Mr. Wallin said the need for companies to report good combined ratios against a background of low interest rates and low investment returns means that the market likely would remain disciplined.
While rates for property catastrophe business have declined during 2013, they likely will stabilize for 2014, said Michel Liès, CEO of Swiss Re.
About 70% of the estimated $40 billion of alterative or convergence capital underwriting reinsurance risk is dedicated to U.S. property catastrophe risk, noted Matthias Weber, group chief underwriting officer at Swiss Re.
Of the remainder, about 25% is underwriting European catastrophe risk and 5% other business, Mr. Weber noted.
Since April 2013, the price of alternative reinsurance for U.S. property catastrophe risk has been stable, Mr. Weber said.
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