Reinsurance rates for most lines of business decreased at the January 1, 2010 renewal, in response to a substantial recovery in the capitalization of the reinsurance sector. The combination of the rally in investment markets, much reduced catastrophe loss activity, and recessionary effects on demand resulted in an excess of supply and increased competition. Macro-economic trends had an impact on reinsurance capital and pricing, and the environment in which reinsurers operate will continue to be influenced by global economic conditions as much as by underwriting.

Looking Ahead
The start of 2010 has the reinsurance market at ample capacity, with January 1, 2010 renewals reflecting price declines. Competitive conditions may be tempered by rising accident-year loss ratios, diminishing releases from prior year loss reserves, inflation, and increased capital demands..