Property catastrophe reinsurance rates are increasing up to 10% in Japan and are showing smaller rises in other areas, a report by reinsurance broker Aon Benfield states.
A strong Japanese yen, which has gained significantly against major reinsurance market currencies during the past year, is partly responsible for pressure on capacity for Japanese programs and reinsurance rate increases of 5% to 10%, according to Aon Benfield\'s recent update to its "Reinsurance Market Outlook" report.
In Europe, property catastrophe reinsurance prices are around 5% higher. Flood risks remain a concern for reinsurers in Europe, the report says.
Insurers and reinsurers in the United States are watching Florida legislators to see how that state will address an estimated $18.5 billion shortfall in the state-controlled hurricane catastrophe fund, the report says, adding that the situation creates uncertainty in reinsurance demand in the United States.
"The April reinsurance renewals continued the global trends witnessed in January, with the exception of the significant influence of currency fluctuations, mainly the significant strengthening of the Japanese yen over major reinsurance market currencies," Bryon Ehrhart, chief executive officer of Aon Benfield Analytics at Aon Corp. in Chicago, said in a statement. "Reinsurers continue to have sufficient capacity to meet the increasing reinsurance needs of insurers that continue to be challenged by the global credit and liquidity crisis."
