The primary marine market experienced flat and some reduced rates overall with a 5 percent to 10 percent reduction in many exposures. Generally loss experience in 2009 was favorable. Exposure reductions have been particularly evident in the cargo market as the economic downturn has prompted a significant reduction in the volume of goods shipped. The liability and P&I lines experienced flat to 10 percent increases while the offshore energy business was basically flat with some decreases of up to 10 percent for exposures outside the Gulf of Mexico. The outlook for 2010 is for further price softening as competition remains strong, some new capacity has entered the market and loss experience has been favorable.
The reinsurance market experienced overall rate reductions between 5 percent and 10 percent and some quota share business achieved an increase in ceding commissions. For clients with adverse loss experience seeking excess of loss reinsurance in the London market, rates ranged from flat to a 10 percent increase. Generally LMX business experienced flat to 10 percent rate reductions. Liability reinsurance remained firm with flat to 10 percent rate increases.
Several clients increased retentions, sometimes by not renewing layers, but overall vertical limits remained largely unchanged. There is currently ample capacity chasing less business and several reinsurers have sought larger lines, particularly for energy business that excludes Gulf of Mexico wind. The 2010 outlook is for a stable market with adequate and financially secure capacity. In the absence of losses there should be further downward pressure on pricing. Cargo in particular has potential for further softening due to the continued impact of the economic downturn.