The reinsurance market is adrift and directionless as it begins to focus on the 2012 renewals due to a period of heightened uncertainty, said Alex Moczarski, President and CEO of Guy Carpenter at the company’s press conference on Saturday at the Monte Carlo Rendez-Vous 2011.
In the absence of a significant loss event, Chris Klein, Guy Carpenter’s Head of Sales Operations for the UK and EMEA regions and Market Relationships, said that the company expects the global market to drift without substantial decreases for the 2012 renewals.
On the European market, Nick Frankland, CEO of the broker’s EMEA operations, said that despite all the challenges and variables that have set the current market adrift, “we believe that there is adequate capacity if it is approached sensibly and carefully”.
Barring late-year CATs or sustained upward revisions of early-2011 loss estimates, these factors will keep aggregate risk-adjusted rates in Europe flat to slightly down at the 2012 renewals.
Speaking at the sidelines of the press conference with Asia Insurance Review, Bill Kennedy, Guy Carpenter’s CEO of Global Analytics and Advisory, said that there is also a level of uncertainty in Asia on how rates will move going into 2012 renewals.
While the headlines flash “earthquakes, tsunamis, tornadoes, floods,” in reality there is still much excess capacity and capital in the system. “I think there is a disconnect between the headline stories and reality of the data in the marketplace,” he said.
Similarly, Frankland said that reinsurers will approach Asia market by market. Rates will likely harden in places where there are losses, such as Japan, Australia and New Zealand. He added that Japan mid-year renewals would have set the tone, but in unaffected markets, “reinsurers will be sensible,” especially with keen competition among reinsurers in the region.