Ed Fenton, Managing Director
Pro Rata Fire
A change from the past few years, the Japanese fire market enjoyed a relatively straightforward renewal at April 1, 2009. During the 2008 renewal process, insurers indicated that they would undertake various measures to improve the original business that forms the subject matter of these treaties. This year, it was desirable for each buyer to provide some kind of statement or presentation to update the market as to their progress against the goals that had been outlined at last renewal. All the major players produced such a statement and these were generally well received by reinsurers.
Fire Excess of Loss
Pricing generally moved broadly in line with exposures. Reinsurer sentiment towards Japanese fire business eased modestly, and the fire capacity purchased by the market increased fractionally.
Generally, pricing moved in line with exposures, with rates the most sensitive to such movements at the higher end of programs. At these higher levels, increases in pricing were sometimes marginally in excess of increases in exposures in order to secure capacity. Average pricing in this market remains firmly in the single digit range and a large amount of capacity is placed at between 1.5 percent and 3.5 percent rate on line (ROL). The market remains extra sensitive to overseas exposures, especially if there is any perception of catastrophe exposure in key catastrophe zones or the United States.