General Insurance Article - Willis Re reviews positive start to year for reinsurers

 Reinsurers have seen more positive results in the first quarter of 2012 than in the previous two years according to Willis Re. However, lower levels of loss activity in both the US and International markets, and a gradual improvement in rating levels seen in the primary market, have been overshadowed by reinsurers’ disappointing 2011 result.

 The Willis Re 1st View April Renewals Report, entitled “Measured Response” found that despite the market showing signs of positive development, most reinsurers remain hesitant to increase their portfolios, preferring to focus on managing underwriting volatility and conserving capital whilst waiting for signs of further improvement.

 The report notes that some primary buyers are reluctant to manage increased reinsurance costs through reduction in purchases and are restructuring their programmes to maintain retention levels, although this trend is not being seen in the larger US primary companies, who are seeing a continuing increase in their property cat retentions.

 Peter Hearn, chairman of Willis Re, comments “Reinsurers remain focused. They are taking a highly segmented and increasingly disciplined approach to terms and conditions and are not seeking to apply blanket rate increases. In turn, this is leading to wider variations in rate movement by territory and class.”