Willis reports on reinsurance renewals

Willis Group Holdings (NYSE:WSH) recently released its reinsurance review of the marketplace for the January 1, 2006 renewals, which indicates key findings including rate movements and territory and class line commentary.The report, published by Willis Re, indicates that specialty lines and retrocession have been catastrophically impacted by the hurricanes that hit in the 2005 season. Specifically, the report noted that Marine and Energy lines were seriously damaged with results that, on a gross basis, are the worst on record. The impact of the 2005 hurricane season, the report continues, has dominated the US Reinsurance renewal season at January 1, 2006. Some major catastrophe programs, Willis Re indicates in the report, are currently incomplete notwithstanding significant elevation of attachment points and substantial increased in premium.However, the internationally arena did not have the same experience as there are a few territories that have had localized cat losses. These losses, according to Willis are not nearly as severe as the losses the US sustained in autumn 2005.Willis says that international casualty reinsurers are concerned with controlling their exposure to terrorism, while some US reinsurers are excluding difficult exposures completely.Rating agencies, risk modelers and reinsurance companies will, the report concludes, require greater transparency, analysis, exposure control, and structured clarity as a result of recent cat events.The report also found that growth of hedge fund/capital market participants outstripped their own infrastructure.