Almost every discussion of 2012 reinsurance rates for U.S. property risks touches on major changes in catastrophe models—both the recently released Risk Management Solutions (RMS) version 11.0 U.S. Hurricane Model; and, to a lesser extent, AIR Worldwide's revisions released last year but only now making their way through the system.
James Vickers, chairman of Willis Re International & Specialty, is one of a number of experts who believes the RMS changes already have had some upward impact on pricing on certain mid-year U.S. property-catastrophe renewals—and he expects this trend to continue in the Jan. 1, 2012 renewals.
However, he anticipates RMS changes for European windstorm will have less impact because most buyers there are still assessing how the model change will affect their holdings “and because models other than RMS are widely used” across the Atlantic, Vickers adds.
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