Prices for property catastrophe reinsurance in the UK fell by between 10% and 15%. In Europe prices fell by between 5% , according to broker Willis, while in the US prices were down by between 2.5% and 7.5%
The price declines are partly driven by the primary insurers that buy reinsurance, who are facing falling rates themselves. “Primary insurers have been asking reinsurers to help them by reducing costs and widening the coverage,” said Mr Vickers. Other factors pushing rates down include an influx of capital into the sector from sources such as insurance-linked securities, and an absence of large property catastrophe losses. According to preliminary data from Swiss Re, there were $32bn of insured catastrophe losses in 2015, down 11 per cent on 2014 and about half the level of the $62bn 10-year average. The floods affecting large parts of the UK are not thought to be widespread enough to have a significant affect on reinsurance pricing.