Toronto, ON (Apr. 12, 2013) – Guy Carpenter & Company, LLC, the leading global risk and
reinsurance specialist, reports that dynamic capital growth and ample reinsurance capacity resulted
in a relatively stable renewal at April 1, 2013. In a briefing released today, Guy Carpenter comments
that the convergence of traditional and alternative capital sources is changing the marketplace, with
non-traditional capacity now making up an estimated 14 percent of global property catastrophe limit.
Guy Carpenter says this environment benefited insurers at April 1, 2013, which is a significant
renewal date for the Asia Pacific region. Reinsurance pricing in Asia generally stabilized or fell
marginally this year as the adverse conditions experienced in the wake of the Tohoku earthquake in
Japan and Thailand flooding in 2011 generally gave way to modest softening. Rates did increase in
Korea, however. In the United States, non-traditional capacity is having a significant impact on
property catastrophe business. Indeed, traditional reinsurance pricing to date has decreased on
similar coverages from the January 1 renewal.
Key highlights from the briefing include:
- Japan: Rates decreased moderately for most catastrophe excess of loss lines in Japan due to a
year largely absent of major catastrophe losses. However, the losses from the Tohoku
earthquake and the Thailand floods in 2011 still influenced the 2013 renewal by limiting
downward pressure on prices.
- Republic of Korea: The Korean insurance market endured a relatively turbulent 2012 after being
hit by three typhoons. Adjustments were consequently made to pricing, resulting in rate increases
to catastrophe excess of loss treaties on a risk adjusted basis. Pricing for loss-affected risk
excess of loss treaties also rose significantly.
- India: The Indian domestic treaty renewal was subject to an environment similar to that faced by
other territories in the Asia Pacific region. The softer market conditions saw reinsurance buyers
increase their attachment points to save money or negotiate further in order to maintain a similar
reinsurance spend against meaningful exposure growth.
- U.S. Property Catastrophe: For the few but sizable placements renewing at April 1, traditional
reinsurance pricing was down generally in the single digit range. Non-traditional capacity has
impacted the market and is expected to continue to do so in the upcoming June renewals.
“The April 1 reinsurance renewal saw pricing stabilize in most regions as insurers benefited from an
environment of dynamic capital growth,” said David Flandro, Global Head of Business Intelligence, Guy Carpenter & Company, LLC. “Much of this growth emanated from non-traditional sources,
confirming that the convergence between traditional reinsurance and capital market solutions has
Guy Carpenter feels that an accurate understanding of how the market is converging and where the
capacity will be deployed is essential to creating new competitive advantages at future renewals.
This begins with an accurate and rigorous study of the sources and uses of capital, as well as an
accurate quantification of available and deployed reinsurance capacity. Guy Carpenter is uniquely
positioned to assist clients and reinsurers in this area in the pursuit of opportunities for profitable
For more information, visit www.gccapitalideas.com.
About Guy Carpenter
Guy Carpenter & Company, LLC is a global leader in providing risk and reinsurance intermediary services. With
over 50 offices worldwide, Guy Carpenter creates and executes reinsurance solutions and delivers capital
market solutions* for clients across the globe. The firm’s full breadth of services includes line-of-business
expertise in agriculture; aviation; casualty clash; construction and engineering; excess and umbrella; life,
accident and health; marine and energy; medical professional liability; political risk and trade credit;
professional liability; property; retrocessional reinsurance; surety; terrorism and workers compensation. GC
Fac® is Guy Carpenter’s dedicated global facultative reinsurance unit that provides placement strategies,
timely market access and centralized management of facultative reinsurance solutions. In addition, GC
Analytics®** utilizes industry-leading quantitative skills and modeling tools that optimize the reinsurance
decision-making process and help make the firm’s clients more successful. For more information, visit
Reactions magazine named Guy Carpenter Best Global Reinsurance Broking Company Overall and Best
Reinsurance Broking CEO of the year in 2012. At the Reactions London Market Awards, Guy Carpenter was
also named Reinsurance Broker of the Year and took home Reinsurance Broking Team of the Year honors
for both Property and Aviation. In the past year, Guy Carpenter has also won: Global Best ILS Advisor (GC
Securities*), US Best ILS Advisor (GC Securities*) and US Best Broker for Casualty Reinsurance from
Intelligent Insurer, Insurance Day’s 2012 ILS Transaction of the Year (GC Securities*), and Reinsurance
Broker of the Year for the Asia-Pacific region at the 16th Annual Asia Insurance Industry Awards.
Guy Carpenter is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of
professional services companies offering clients advice and solutions in the areas of risk, strategy and human
capital. With 53,000 employees worldwide and annual revenue exceeding $11 billion, Marsh & McLennan
Companies is also the parent company of Marsh, a global leader in insurance broking and risk management;
Mercer, a global leader in talent, health, retirement, and investment consulting; and Oliver Wyman, a global
leader in management consulting.
*Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities Corp., a US
registered broker-dealer and member FINRA/SIPC. Main Office: 1166 Avenue of the Americas, New York, NY 10036. Phone: (212) 345-5000.
Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe)
Ltd., which is authorized and regulated by the Financial Services Authority. Reinsurance products are placed through qualified affiliates of
Guy Carpenter & Company, LLC. MMC Securities Corp., MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates
owned by Marsh & McLennan Companies. This communication is not intended as an offer to sell or a solicitation of any offer to buy any
security, financial instrument, reinsurance or insurance product. **GC Analytics is a registered mark with the U.S. Patent and Trademark