Willis Re: Europe is a Reinsurance Buyer’s Market, with Loss Free Rates Likely Down 5-10 percent at
1 January 2014 Renewals
Baden-Baden, Germany, 21 October, 2013, Increased capacity, competition and changing market dynamics have created a buyer’s market
for European cedants, according to Willis Re, the reinsurance arm of Willis Group Holdings plc, the
global risk advisor, insurance and reinsurance broker (NYSE: WSH).
These market conditions, coupled with changing reinsurance buying patterns, are driving reinsurers to offer more flexibility and
tailored solutions to European clients.
Tony Melia, CEO of Willis Re International, said: “With large parts of Europe so far experiencing another
year of exceptionally low natural peril loss activity, reinsurers are facing significant rating pressure on catastrophe
programmes in loss free territories on the back of the excellent 2012 and 2013 results. Absent
of a major loss event, we expect risk adjusted reductions of 5% to 10% for straight
forward loss free business with the reductions on individual programmes being influenced by programme history and
Reinsurers are also reviewing their view of risk on loss affected programmes, which together with the history
of the placement and individual loss experience will determine the pricing level at renewal.
Melia continued: “Even loss affected programmes will benefit from the current soft market conditions and will receive
more modest adjustments than during previous pricing cycles. Above all though, the current market environment enables
cedants to consider buying the reinsurance that they want, in addition to what they need.
“Cedants should take advantage of reinsurers’ flexibility and their willingness to provide company wide solutions to protect
against earnings volatility alongside capital protections. These, together with the use of reinsurance structures to consolidate
risk appetites, are the underlying drivers of changing reinsurance strategies in the industry.”
About Willis Re
One of the world's leading reinsurance brokers, Willis Re is known for its world-class
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and reinsurance carriers as well as national catastrophe schemes in many countries around the world. The
broker's global team of experts offers services and advice that can help clients make better reinsurance
decisions and negotiate optimum terms. For more information, visit www.willisre.com.
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