February 2008
2008 Market Update - Insight from Guy Carpenter Credit, Bond and Political Risk Team
Selected highlights from the report
-
-The market’s premium volume is generally estimated at around US$7.75bn and income from services may increase that figure by as much as $1bn.
-
-Consolidation of insurers is underway again after the activity of the 1990's led to the top four groups taking as much as 85% market share. Limited expansion opportunities in core markets, mainly Western Europe and North America, is driving this.
-
-The 2008 renewal season took place in a continuing soft market for cedants to take advantage of, due principally to the lack of catastrophe events.
-
-Not just prime insurers are having a better time of it, the top 10 reinsurers had combined ratios of under 90% and consequently enjoy strong capital positions.
-
-The Surety market was stable in 2007 but an area of growth was Payment Guarantees. A portion of these are Financial Guarantees and continue to present considerable problems for the reinsurers, and there are very few who wish to these products expand into core areas of activity.
-
-The Political Risk market has seen far higher growth levels, with increased levels of perceived political risk increasing amongst other reasons.
-
-The Credit market has seen intense competition for 'new new' business, i.e. that not previously insured, while the extreme pricing competition for existing business has been moderating, and differentials such as credit limit capacity has been a more important factor. Risk appetite may be decreasing even though there are few actual capacity restrictions. Furthermore, with increasing claims and payment delays, insurers are signalling higher rates.
-
-The report also discusses developments in the reinsurance market in respect of each of these sectors and makes predictions for 2008, and the 2009 renewal season.
The 60 page report will be selectively available on application to:
David Edwards, Senior Vice President, Credit, Bond and Political Risk Team
Tel : +44 (0)20 7357 1102 or email: david.edwards@guycarp.com