Guy Carpenter have published the first part of their report looking at the World Catastrophe Reinsurance Market. In it they look at the major loss events of the first half of 2010 and comment on how the market is fairing.
A major topic in the report is pricing. Guy Carpenter say that despite the $23b of insured losses from the first six months of the year reinsurance pricing is still on a downward trend. Global catastrophe reinsurance rates fell on average 6% during 2010 renewals according to the Guy Carpenter World Rate on Line (ROL) Index. They say a loss of $20b to $30b is needed to stabilise the market while a loss of $50b could correct pricing.
On catastrophe bonds, they say issuance will be influenced by how many catastrophes there are during the second half of the year, in particular the Atlantic hurricane season has the ability to change the market dynamic depending on severity of storms.
Here’s some data from the report on the main catastrophe events from the first half of the year.
| Date | Event | Region / Country | Insured loss (USD million) |
|---|---|---|---|
| January 12 | Earthquake | Haiti | 150 |
| February 26-28 | Windstorm Xynthia | Europe | 3,400 |
| February 27 | Earthquake | Chile | 8,000 |
| March 1-3 | Hailstorms | Melbourne, Australia | 755 |
| March 13-15 | Severe weather | United States | 1,045 |
| March 22 | Hailstorms | Perth, Australia | 760 |
| April 20 | Oil rig explosion | Gulf of Mexico | Up to 3,500 |
| May 12-16 | Severe weather | United States | 1,065 |
| May/June | Floods | Central & Eastern Europe | 280 |
| June 15-16 | Floods | France | 865 |
We’ll have to wait a while until we know whether Hurricane Igor has made significant losses on Bermuda, although we hear it is expected to be in the hundreds of million dollars.
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