Reinsurance rates fell for most classes of business and geographic areas at the April 1 renewal, according to a report published Tuesday by Willis Re, the reinsurance arm of Willis Group Holdings P.L.C.
Continued additional supply of capital from non-traditional sources, as well as strong results for traditional reinsurers in 2013 meant there was an “oversupply of capacity chasing muted demand,” according to Willis Re.
According to the report, rates for U.S. nationwide property business fell by as much as 20% for non-loss-affected lines.
Japanese earthquake rates fell by as much as 17.5% for non-loss-affected business, Willis Re said, while rates for wind and flood coverages in Japan fell by as much as 15% on business that has not seen a loss.
And Indian property rates fell by as much as 20% on non-loss-affected lines.
Reinsurance rates in Korea fell by up to 15%, the report noted.
“The April 1 renewals have seen a softening of rates of across nearly all classes and geographies which, in turn, has allowed buyers to achieve substantial savings in the cost of their reinsurance protections,” John Cavanagh, CEO of Willis Re, said in a statement.
“Some buyers took the opportunity to buy more cover, and some renewals saw an expansion in terms and conditions,” he said.
“The overriding target for most buyers, however, was to achieve price reductions or an increase in ceding commissions,” Mr. Cavanagh added. Restructuring and consolidation of covers by some of the larger buyers continues to be a trend.”
The report can be found here.