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Aon Benfield, the world’s premier reinsurance intermediary and capital adviser, has released its April 1, 2009 Update to its Reinsurance Market Outlook report, which shows firming property catastrophe rates across most regions as the market completes April 1 renewals.

Japan’s catastrophe risks dominate the renewals period, and a strong yen – which has gained significantly against major reinsurance market currencies during the past year – is partly responsible for pressure on capacity for Japanese programs and consequent rate rises of between 5 to 10 percent.

Bryon Ehrhart, chief executive officer of Aon Benfield Analytics said: "The April reinsurance renewals continued the global trends witnessed in January with the exception of the significant influence of currency fluctuations, mainly the significant strengthening of the Japanese yen over major reinsurance market currencies.  Reinsurers continue to have sufficient capacity to meet the increasing reinsurance needs of insurers that continue to be challenged by the global credit and liquidity crisis."

Meanwhile, US catastrophe risks do not feature heavily at April 1. The current Florida legislative session is being watched carefully by all exposed insurers to determine how that state will address the estimated $18.5 billion shortfall in its projected loss reimbursement commitments from the state controlled hurricane catastrophe fund.  The illiquidity in the municipal bond market has created the potential financing shortfall and this capacity is critical to many insurers.  Incremental private reinsurance demand coming from these insurers is difficult to estimate as the state explores backup financing from many sources including the U.S. federal government.

In Europe, the Market Outlook report highlights property catastrophe renewal prices that tended to be firmer, of the order of around 5 percent. Small programs were easily placed but flood risk remains a concern for reinsurers for bottom layers of catastrophe programs.

Property catastrophe retrocession and trade credit/bond reinsurance capacity remains tight producing shortfalls for some programs.

Andrew Appel, chief executive officer of Aon Benfield, concluded: “As expected, pricing in the property catastrophe reinsurance market generally continues to firm. In the regions where reinsurers have higher accumulations – such as Japan, Europe and the US – naturally, rates have increased more significantly than outside of peak zones and accumulations. Having said that, local dynamics were still a factor at April 1, and sometimes helped to buck any general regional pricing trend.”  

Click here for the April 2009 renewals report.

                                                              --ENDS--

About Aon Benfield
Aon Benfield is the world’s premier reinsurance intermediary and capital advisor, providing clients with integrated capital solutions and services. The company offers clients access to every traditional and alternative market in the world, through an international network of offices spanning over 50 countries and more than 4,000 professionals. Its worldwide client base is able to access the broadest portfolio of integrated capital solutions and services, world-class talent, unparalleled global reach and local expertise to best meet their business objectives. Aon Benfield is the industry leader in treaty, facultative and capital markets transactions.

Aon Benfield Analytics is the industry leader in actuarial, enterprise risk management, catastrophe management, and rating agency advisory. Our track record of innovation and world-class position in analytics, modeling and client-facing technology helps our clients optimize their portfolios. Proprietary tools include ReMetrica, Prime/Re, CatPortal, and ExposureView.

About Aon
Aon Corporation (NYSE: AOC) is the leading global provider of risk management services, insurance and reinsurance brokerage, and human capital consulting. Through its more than 37,000 colleagues worldwide, Aon readily delivers distinctive client value via innovative and effective risk management and workforce productivity solutions. Aon's industry-leading global resources and technical expertise are delivered locally through more than 500 offices in more than 120 countries. Named the world's best broker by Euromoney magazine's 2008 Insurance Survey, Aon also ranked highest on Business Insurance's listing of the world's largest insurance brokers based on commercial retail, wholesale, reinsurance and personal lines brokerage revenues in 2008. A.M. Best deemed Aon the number one insurance broker based on brokerage revenues in 2007 and 2008, and Aon was voted best insurance intermediary, best reinsurance intermediary and best employee benefits consulting firm in 2007 and 2008 by the readers of Business Insurance. For more information on Aon, log onto http://www.aon.com/.

For further information please contact:
David Bogg
Aon Benfield
t: +44 (0)20 7522 4016
e: david.bogg@aonbenfield.com
 

Andrew Wragg
Aon Benfield
t: +44 (0)20 7522 8183
andrew.wragg@aonbenfield.com
 

David Prosperi
Aon Corporation
t: +1 312 381 2485
e: david_propseri@aon.com