January renewals show “tale of two markets”

January renewals in the United States and Europe are telling a “tale of two markets,” according to Grahame Millwater, the chairman and CEO of Willis Re, who was quoted in the recent edition of A.M. BestWeek.A.M. Best notes in the Jan. 23, 2006 edition of its newsletter that “a few months after the record-breaking losses suffered from last year’s hurricanes, speculation has been rife in the property/casualty markets about the impact of all that destruction on reinsurance treaties in the January renewal season.”From the vantage point of London, A.M. Best notes, “last year’s major hurricanes in the United States had a relatively subdued effect on reinsurance renewals.” From the vantage point of the United States, however, Benfield Holdings is quoted as saying that “as anticipated, rates increased dramatically in the U.S.A., particularly for loss-affected areas.”Guy Carpenter notes the U.S. property catastrophe market was “unsettled,” with “wide divergence between what insurers wanted to pay and what reinsurers were willing to accept.” According to A.M. Best, “pricing increases ranged from 10% to 100%, indicating ‘considerable disparity’ depending on the hurricane exposure and national-vs-regional accounts. Willis Re is reported as saying price increases for U.S. accounts hit by hurricane losses ranged between 30% and 100%, whereas U.S. and European property catastrophe accounts that were unaffected by the 2005 hurricanes were either flat or had small increases.