U.S. property catastrophe reinsurance market rates continued to rise at the April 1 renewal, according to a briefing released by Guy Carpenter & Co. L.L.C. on Tuesday, extending the upward pricing trend that began earlier this year.
According to the New York-based Guy Carpenter, national reinsurance program prices rose between 10% and 14% on a risk-adjusted basis, with the northeastern United States seeing as much as 6% to 8% increases. Risk-adjusted pricing was up 12% to 14% on average for residual markets.
By comparison, reinsurance rates increased 11% on average at the Jan. 1 renewal period, according to Guy Carpenter. Year-over-year pricing continued to rise as prices were up 14% to 16% for higher layers and 10% to 14% in lower layers, compared with 2008.
Capacity needs, regions and specific perils were among the factors influencing the final rates that insurers were able to secure, Guy Carpenter wrote in its briefing, adding that rising pricing trends were "substantially impacted" by the availability of capacity.
Guy Carpenter predicts capital will continue to tighten this year, as uncertainty in the financial markets is likely to impair investment assets.
"Capital has undoubtedly been constrained, and this is translating into decreasing capacity in a number of areas, which then has an impact on reinsurance pricing," said Lara Mowery, head of Guy Carpenter\'s global property specialty practice, in a statement.
