US marine and energy rates on line generally renewed at expiring terms for loss-free programs, and very few programs had losses. Those that did saw reinsurance rate increases of up to 10 percent, but they mitigated the cost by increasing retentions.
The cargo market is still impacted by reduced economic activity in the United States: Competition is fierce for a smaller volume of traded goods and cargo insurance. Cargo rates are off 5 percent to 10 percent, and hull is renewing at expiring terms. Offshore energy pricing is higher, and more liability limit is being bought following the Deepwater Horizon event. Offshore primary market energy rates increased 15 percent to 20 percent following this incident, compared to reductions of around 10 percent before April 2010. These trends are expected to continue in 2011.
In the reinsurance market, excess of loss is renewing at expiring terms or at a slight reduction of up to 5 percent where the program’s record is superb. Many cedents did not attain EPIs (earned premium incomes) and sought relief from reinsurers. Programs without energy exposure are particularly attractive to reinsurers. Thus, they are renewing at expiring terms and pricing, while energy renewals are up 25 percent to 35 percent in London market. Capacity remains abundant.