(Bloomberg) -- The world’s largest reinsurers are anticipating even bigger price declines when policies are renewed in 2016 than envisaged a month ago as a flurry of takeovers in the industry fails to absorb some of the excess capital.
Reinsurers and brokers including Guy Carpenter, owned by Marsh & McLennan Cos., flew into the German town of Baden-Baden this weekend to continue negotiating terms and conditions for contracts due for renewal in January. It follows discussions that were held in Monte Carlo in September, which suggested the price slump may be slowing.
“In Monte Carlo, we were certainly suggesting that rate reductions will be in the region of between 5 to 7.5 percent to maybe 10 percent,” said Nick Frankland, chief executive officer of Guy Carpenter’s operations in Europe and the Middle East. “They may be more than that. The market is struggling to understand how to quote in this environment.”
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