The report suggested that the continued softening has been driven by the realisation that for the global reinsurance industry, the June and July renewal seasons represent the last realistic chance for underwriters to meet their 2017 premium targets.
Willis Re said this was seen in the Florida renewals where “a larger than anticipated influx” of capacity, particularly from insurance-linked securities (ILS) markets, led to a further drop in pricing from the 2016 renewals, and at a greater pace than the reductions seen on US property catastrophe earlier this year.
The report found that underlying loss and expense ratios for many reinsurers are “showing a worrying trend, with combined ratios for many classes now looking unattractive”.
John Cavanagh, global CEO of Willis Re, said: “Yet again, we’re in a position where the weakening in the global reinsurance industry’s performance has not reached an unacceptable level.”
Cavanagh added: “Reinsurers across the board do not yet feel compelled to take a stronger stance over conceding further modest rate reductions and walking away from clients. Much now will depend on loss activity in the traditionally more active third and fourth quarters and on any instability in investment returns.”