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BestWeek: For Reinsurers, 2009 Renewals Will Hinge on Hurricane Season, Economic Downturn

OLDWICK, N.J.-(Business Wire)-July 3, 2008 - The course of the softening global reinsurance market will depend heavily on how the summer Atlantic hurricane season develops and what impact that will have on renewals negotiations heading into 2009, according to a story in BestWeek Europe.

And more is on the minds of reinsurers, particularly the ongoing financial turmoil arising from the subprime mortgage crisis and credit crunch, along with predictions of recession or depression in various countries.

"There's been a general slowing down in growth, especially in the industrial countries," said Chris Klein, global head of business intelligence at reinsurance broker Guy Carpenter & Co. "There's pressure on costs and expenses. People are starting to review their insurance exposures and deciding what they really want. This will filter down to reinsurance, but at the moment it is too early to say what the impact will be, as there are aggravating factors involved."

Sean Mooney, chief economist at Guy Carpenter, told BestWeek Europe there has been a 10% to 15% reduction in reinsurance rates up to mid-year renewals this year, and there is now pressure on the investment side of balance sheets as the stock markets fluctuate.

Also, in BestWeek U.S./Canada:

— Trade credit insurers are fielding record numbers of insolvency and past due claims thanks to the subprime mortgage crisis and the ongoing credit crunch; and

— Recent partnerships by two U.S. health insurers with technology giants Microsoft Corp. and Google highlight just how much work must be done to achieve easy access to personal health records.

And in both editions of BestWeek:

Twelve of the 15 A.M. Best Insurance Stock Indices finished down at the end of second quarter 2008.

BestWeek is published by A.M. Best Co. for insurance professionals. To subscribe, please call A.M. Best's customer service department at (908) 439-2200, ext. 5742, or e-mail your request to customer_service@ambest.com.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

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