Marine reinsurance rates drop says Guy Carpenter
Reinsurance rates for the marine sector are down by between 5 and 20 per cent for January renewals. That’s according to Guy Carpenter which reports that even the estimated $3.3 billion losses form the Tianjin blasts failed to increase rates. The reinsurance broker said that higher completion and slower growth in China were keeping rates lower. The firm’s Chris Klein told a news conference that there has been a drop in levels and values of cargo being moved. Aerospace reinsurance rates are also down by between 10 and 20 per cent compared to this time last year.
Negative outlook for commercial lines P/C
AM Best has kept the commercial lines sector of the US property/casualty industry on a negative rating on expectation of further downgrades in 2016. The personal lines sector remains on a stable outlook. Moderation and declines in commercial lines P/C pricing, low investment yields and the potential for adverse loss reserve development are all factors in the negative outlook for the commercial sector.
A.M. Best believes core accident-year margins for commercial lines will continue to be pressured as rate increases moderate, and in some lines, actually decline. A material line in this sector, commercial automobile, is expected to continue experiencing rate increases in 2016 amid a positive accident-year trend; however, adverse development in the line has wiped away any benefit recognized from these increases.
Government warning as wildfires hit new record
Wildfires destroyed a record amount of land in 2015 according to new data from the US Department of Agriculture. Fires burned 10,125,149 acres, beating the previous record set in 2006 and highlighting the increasing risk to drought-stricken land. Thirteen firefighters lost their lives tackling wildfires in 2015 and 4,500 buildings were destroyed. The increasing incidents and ferocity of wildfires and the lengthening season of the fires is a concern and the Dept. of Agriculture’s statement warned: “The costs of wildfire preparedness and suppression now account for 76 percent of the Interior wildfire management program budget and, as in the case of the Forest Service, reduce the amounts of funds available for fuels management and restoration efforts. These activities are essential for reducing risks of catastrophic fires, increasing the resiliency of lands to recover from fire, and to protect communities and infrastructure.”
