Japanese market renewals sees catastrophe rates down 10%
Reinsurance broker Benfield Group reported continued softening of the reinsurance market in the first four months of 2008.
In an interim management statement prior to the company’s annual general meeting today, the broker the annual reinsurance renewal for the Japanese market on 1 April 2008 had showed reductions in catastrophe rates for windstorm and earthquake of up to 10%. This was in line with Benfield’s expectations.
In the broader reinsurance market the declining trend in pricing had also continued, reflecting an abundance of reinsurance capital, the absence of recent major catastrophe losses in most territories and increasing competition among reinsurers, the broker said.
Grahame Chilton, chief executive of Benfield, said: “The business continues to face headwinds in the form of adverse currency trends and the softening reinsurance market. Nevertheless, we are firmly focused on achieving targeted cost savings while continuing to pursue opportunities for profitable growth, particularly those made available by our capital markets expertise.
“An improvement in the trading environment in the important Florida catastrophe reinsurance market seems increasingly likely as a result of the proposed revisions to the legislation regarding the Florida Hurricane Catastrophe Fund."
Chilton added: “However, at this stage, absent any significant improvement in market conditions, we continue to anticipate the 2008 trading result will be marginally below that for 2007. We remain committed to delivering value to shareholders through our long-term goal of growth across cycles and I am confident of the Group’s prospects for future progress.”
Benfield is implementing expense reduction initiatives designed to achieve annualised savings of £15m from 2009, as announced in March in its preliminary results for 2007.
