It’s only right that the world’s ultimate risk takers should have their annual convention in a place famed for its casino–Monte Carlo.

Each year at the beginning of September the industry’s decision makers fill the hotel lobbies of the tiny principality to start their contract renewal discussions.

They’ve been doing it for over 50 years—and every year seems to deal a new hand with a different wild card: a run of costly nat cats, terrorism, tighter regulation or a sapping financial crisis.

What will it be this year? With a relatively calm hurricane season so far and financial markets stabilising, could it be that lady luck is smiling on reinsurers?

New numbers just out bode well. The Guy Carpenter Global Reinsurance Composite, which tracks earnings, posted an aggregate increase of US$4.6bn for the first six months of 2009, compared to an aggregate loss of US$3.5bn for the same period last year.

Unrealised and realised investment losses fell by 87% and 43% respectively year on year. Underwriting earnings for the composite rose by 9.6%, compared to last year, reaching US$2.2bn, with combined ratios dipping from 85.6 to 84.9.

This combination of recovering asset values and positive earnings helped restore balance sheets too: aggregate shareholders equity for the Guy Carp composite climbed by 8.2% during the first half of 2009.

What does all this mean for premium rates? The big picture, according to brokers, is for the rating environment to be relatively unchanged from the July 1 renewals: in other words ‘holding firm’.

But a lot can happen between now and the January 1 call for reinsurers to ‘faites vos jeux’.

Related links:

RVS—Les Rendezvous de Septembre

Tags: Convention, Reinsurance

This entry was posted by Garry Booth on Thursday, September 3rd, 2009 at 10:51 am and is filed under Insurance Commentary, Market Operations.