The Latin American July 1, 2012, renewals were generally a continuation of trends seen at January 1, 2012.
Latin American catastrophe excess of loss business rates were flat to up 5 percent. Some of the large capacity providers pushed for more, especially on the higher layers, but they received resistance from buyers and brokers who knew that other options existed for all but the largest programs. Property pro rata terms were flat, with capacity and terms that were similar to those that were seen at the January 1, 2012, renewal.
Catastrophe excess of loss business in the Caribbean experienced slightly higher increases between 3 and 7.5 percent, while property pro rata accounts renewed with generally unchanged terms.
Risk excess of loss prices were stable but varied depending on each individual company’s loss experience. In Brazil, where risk excess of loss is a staple, pricing stabilized, but reinsurers offered slightly improved terms regarding capacity and conditions.
These considerations also applied to facultative property business, although the London market pushed for more significant rate hikes.
Despite the new regulatory environment in Argentina, cedents and reinsurers found successful ways to continue to transact business, as the market finds its natural level.
Available capacity in the region remained sufficient, bordering on excessive, with several new entrants.