Fenton, Managing Director
Property-catastrophe reinsurance rates stretched from -10 percent to 7.5 percent at the April 1, 2009 renewal in the Republic of Korea. Fire cover was stable year-over-year, though, and excess of loss (XOL) pricing tended to be flat.
Pricing for casualty and general liability reinsurance tended to favor cedents. This is due largely to the fact that that there is little pharmaceutical or chemical risks covered by Korean programs, although all treaties cover U.S. exports. Limits are small, and the market is highly competitive — heavy oversupply results in pressure on reinsurance rates.
The actual rates attained were driven largely by loss experience, as limits and deductibles remained generally unchanged. Capacity was ample, despite the constraints on capital felt around the world. Relative to the global market, the Korean market is small and is easily serviced with capacity from Asian reinsurers, the Asian offices of global players, and (to a lesser extent) London and Bermuda. The presence of London-based reinsurers has declined over the past several years, and a substantial portion of the capacity available comes from Asian reinsurers.
A new development in an otherwise consistent year-over-year market, some reinsurers expressed concern about an increase in the inclusion of overseas incidental exposures — primarily in Japan, China, and the United States - in domestic programs. However, no action was taken, and treaties renewed with unchanged conditions.