The recent Tohoku earthquake in Japan combined with other catastrophes in Asia will slow declines in property-catastrophe rates for US business in the June/July renewals. But a true hard market remains another major catastrophe away.
As the reinsurance industry digests the recent April 1 Asian renewals and prepares for the US equivalent in June/July, the majority of players will hope that the recent series of catastrophes in Asia combined with ongoing political unrest in the Middle East will be enough for rates to begin hardening after what has been a long soft market.
They could be sorely disappointed. While most players report some evidence of hardening on property-catastrophe lines—especially those with exposure to Asia—these increases are not significant as yet and most other lines of business remain stubbornly flat.
According to reinsurance broker Guy Carpenter, the US property-catastrophe market is in transition. Its preliminary analysis of the market, completed in a report issued at the start of April, suggests that renewal pricing is roughly flat to up slightly—a positive change compared with the decrease of between 6 percent and 10 percent it reported in the January 1 renewals.
Tohoku earthquake, Japan, Reinsurance, Guy Carpenter, property-catastrophe