In a market with generally healthy conditions for (re)insurers, property catastrophe rates declined an average of 10 percent but accounts with losses showed average increases of 15 percent. Casualty rates were flat while accounts with losses showed average increases of 10 percent. Rate changes on risk were flat to declining five percent for cedants with no losses. The marine line rates increased an average of 10 percent and average aviation rate changes were flat. Overall capacity increased with the arrival of new Bermuda entrants in the region and Lloyd’s entrants in Brazil. Competition for market share heated up between established players and the new entrants. The withdrawal of one notable player from the surety line reduced capacity in that line just as large engineering/infrastructure projects are commencing. Ceding commissions increased one percentage point on property and changes were flat on other lines. We see original rates softening further, so the market could present challenges to insurers and reinsurers in the future.
Reinsurers again showed consistent interest in Brazil, the key driver for growth in the region, where the compulsory local market cession was reduced in January 2010 from 60 percent to 40 percent. Uncertainty surrounds Argentina and Venezuela because of recent currency devaluations. The recent Haiti earthquake does not impact the regional insurance community appreciably, but will help to raise awareness of the potential for Caribbean quakes and the need for disaster solutions. Capacity is generally tighter in the Caribbean than in Latin America as a whole, particularly for proportional coverages.