According to a report released by Moody's Investor Service, reinsurance rates are not likely to improve despite a projected increase in the number of perils in certain risk zones.
Risk Management Solutions released a new hurricane model that may have potential ramifications on reinsurance rates: more risk has been put inland as the modeler considers the interaction of wind and the surface of the sea.
Despite this fact there has been a lack of demand in the reinsurance market due to the poor economy. According to Moody's, property re-insurance rates in the United States have decreased by five to ten percent at January renewals.
Moody's says that rate pricing will continue to decrease despite increase in risk in 2011 and asserts that it may be two or three years until the situation improves.
Source:
Hemenway, Chad, "Moody's: Cat Model Changes Won't Offset Lack Of Reinsurance Demand," Property Casualty 360, January 17, 2011
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