A recent survey by the Reinsurance Association of America (RAA) showed negative movement across two critical indicators within the reinsurance marketplace. A compilation of statutory underwriting results from 19 U.S. property and casualty reinsurers revealed that through March 2010 total written net premium was $6.4 billion versus $7 billion for the first three months of 2009. Additionally, the combined loss ratio for the first quarter of 2010 was 102.2 percent compared to 95.5 percent for the first quarter of 2009.

Although this combination of declining revenue and increasing loss ratios might portend upward pressure on rates, or at least flat renewal pricing, that is not likely to happen soon (barring catastrophe events), according to Bryon Ehrhart, chief strategy officer with Aon Benfield. “Aon sees the market as softening,” Ehrhart reported. “Margins are still attractive so rates can still move (down).”

Market direction, however, is always a generalization, peppered with exceptions based on class of business, territory and other factors. What holds true for one line may not for another. For example, professional liability rates for Florida-based real estate related operations have increased, especially for title agents, and underwriting has tightened considerably in the past 24-36 months.