LONDON Dec 30 Global property and catastrophe
reinsurance prices fell 5.7 percent in the key Jan. 1, 2017,
renewal period, a slower decline than in the previous three
years as prices approach record lows, broker JLT Re said on
Reinsurance prices have been falling for the past few years
as traditional reinsurers face competition from new players and
from products such as catastrophe bonds, which offer hefty
returns compared with most global asset markets.
There have also been few major catastrophes in countries
where insurance penetration is high and this has put pressure on
"Global property-catastrophe pricing is now 33 percent below
2013 levels and approaching the previous cyclical low of the
late 1990s," David Flandro, global head of analytics at JLT Re,
said in a statement.
"It is becoming clearer that the scope for further price
reductions is limited for some classes."
In some lines of insurance, rates are near levels where
expected returns were falling below the cost of capital, Flandro
JLT Re's property-catastrophe reinsurance index fell 8.2 pct
at Jan. 1, 2016, renewals, 11 percent in 2015 and 12 percent in
2014. Rates for other forms of reinsurance such as healthcare
were flat to moderately lower at the Jan. 1, 2017, renewals.
Global reinsurance capital of $320 billion remains at record
highs, the broker said.
(Reporting by Carolyn Cohn; editing by David Clarke)