The property risk market in the United States has historically been less impacted by market forces but influenced by specific exposure and experience, making it more difficult to point to a clear pricing trend in the marketplace. Reinsurers also utilize a diverse array of proprietary actuarial models to price per risk programs, resulting in a wide range of views as to the risk adjusted pricing of treaty renewals. For programs with good loss experience, risk adjusted pricing was flat to marginally down. Programs with more significant recent loss activity generally saw risk adjusted price increases in a range of 10 percent to 50 percent.
Market capacity increased year over year and was certainly sufficient to meet client demand, assuming price was considered adequate. Seen as a means of diversifying catastrophe exposure for some reinsurers, there was a notable increase in appetite for per risk business from US treaty reinsurers. This increase in available capacity was partially offset by decreases in capacity offered by some reinsurers in Bermuda who compare the profit margins in per risk business unfavorably with their property catastrophe portfolios. Differences of opinion remain over required cat loads in risk business and this was also visible in some reinsurers’ quotes. There was no major shift observed in terms and conditions of coverage year on year with reinstatement provisions/occurrence limits/aggregate limits broadly consistent in relation to risk limits and premium.