JLT Re (Jardine Lloyd Thompson Group P.L.C.) said on Thursday that U.S. reinsurance prices fell at the June 1 renewals, as the global reinsurance market remains awash with capital.

        The decline in Florida property-catastrophe ROL index prices is accelerating: down 5.1% so far this year, a faster pace than the 3.1% decline in 2014.

        In a statement, JLT Re said participants in and capital flowing to the insurance-linked securities market continue to increase, with renewed vitality. The traditional insurance market and the ILS market are flush with excess capital and intense competition, which continue to drive reinsurance rates down.

        JLT Re said that in a softening market, ample capital combined with reduced catastrophe losses has pushed the median reinsurance price down, bringing renewal terms to their lowest levels since the late 1990s and early 2000s. Prices for Florida business renewing from June 1 are 40% below 2012 levels and only 10% above the market lows of 1999-2000.

       During the June 1 renewal negotiations, reinsurance buyers took advantage of the softening market to demand lower retentions and additional layers of risk coverage. The head of global reinsurance research at JLT in New York said, "Although reinsurance rates are still influenced by the size and track record of the cedant, abundant capital means every reinsurance buyer can fight for more discounts at renewal."

Source: Business Insurance  2017-06-02