An ample supply of capacity from both traditional and nontraditional sources benefited reinsurance buyers at the recent April 1 renewals, according to a report from Aon Benfield Group Ltd., the reinsurance brokerage arm of Aon P.L.C.
Aon Benfield said in the report, published Friday, that it expected “continued benefits to be realized by ceding companies at the June and July key renewal dates.”
“Benign catastrophe losses in 2013 contributed to sub-90 reinsurer combined ratios, and coupled with a 28% growth in alternative capital led to a 7% increase in total reinsurer capital during 2013, representing a nearly 60% increase since the reinsurer capital level of 2008,” the report said.
There was “abundant” reinsurance capacity for Japanese renewals, including the largest programs, according to the report.
Traditional reinsurance carriers offered improved rates, according to the report, while alternative capacity “maintained a presence in Japan earthquake risk.”
The small number of U.S. treaty renewals that took place at April 1 “also saw abundant capacity as well as continued improvement on contractual terms from traditional reinsurers, including relaxed hours clauses, more favorable reinstatement terms and other terms and conditions,” it said.
Renewals that took place in India and the United Kingdom also saw improved rates and terms and conditions, the report noted.
Aon Benfield clients can ask their brokers for details of rate, capacity and retention changes, the report noted.