BADEN-BADEN, Germany, Oct. 21, 2013 (GLOBE NEWSWIRE) -- Increased capacity, competition and changing market dynamics have created a buyer's market for European cedants, according to Willis Re, the reinsurance arm of Willis Group Holdings plc, the global risk advisor, insurance and reinsurance broker (NYSE:WSH).
These market conditions, coupled with changing reinsurance buying patterns, are driving reinsurers to offer more flexibility and tailored solutions to European clients.
Tony Melia, CEO of Willis Re International, said: "With large parts of Europe so far experiencing another year of exceptionally low natural peril loss activity, reinsurers are facing significant rating pressure on catastrophe programmes in loss free territories on the back of the excellent 2012 and 2013 results. Absent of a major loss event, we expect risk adjusted reductions of 5% to 10% for straight forward loss free property catastrophe business with the reductions on individual programmes being influenced by programme history and perceived profitability."
Reinsurers are also reviewing their view of risk on loss affected programmes, which together with the history of the placement and individual loss experience will determine the pricing level at renewal.
Melia continued: "Even loss affected programmes will benefit from the current soft market conditions and will receive more modest adjustments than during previous pricing cycles. Above all though, the current market environment enables cedants to consider buying the reinsurance that they want, in addition to what they need.
"Cedants should take advantage of reinsurers' flexibility and their willingness to provide company wide solutions to protect against earnings volatility alongside capital protections. These, together with the use of reinsurance structures to consolidate risk appetites, are the underlying drivers of changing reinsurance strategies in the industry."
About Willis Re
One of the world's leading reinsurance brokers, Willis Re is known for its world-class Analytics capabilities, which it combines with its Reinsurance expertise in a seamless, integrated offering that can help clients increase the value of their businesses. Willis Re serves the risk management and risk transfer needs of a diverse, global client base that includes all of the world's top insurance and reinsurance carriers as well as national catastrophe schemes in many countries around the world. The broker's global team of experts offers services and advice that can help clients make better reinsurance decisions and negotiate optimum terms. For more information, visit www.willisre.com.
Willis Group Holdings plc is a leading global risk advisor, insurance and reinsurance broker. With roots dating to 1828, Willis operates today on every continent with more than 17,000 employees in over 400 offices. Willis offers its clients superior expertise, teamwork, innovation and market-leading products and professional services in risk management and transfer. Our experts rank among the world's leading authorities on analytics, modeling and mitigation strategies at the intersection of global commerce and extreme events. Find more information at our website, www.willis.com, our leadership journal, Resilience, or our up-to-the-minute blog on breaking news, WillisWire. Across geographies, industries and specialisms, Willis provides its local and multinational clients with resilience for a risky world.