Furthersoftening in reinsurance pricing does not look imminent, and there are signalsthat an "increasing level of discipline" is coming to the market,AXIS Capital HoldingsLtd. President and CEO Albert Benchimol indicated on an April 27call to discuss earnings.
Whilethe reinsurance market remained competitive in the first quarter, there wasresistance to "irrational rate reductions," and the marketpushed back on demands for more generous commissions, terms and conditions, Benchimol said.
AXISCapital grew its portfolio with quota shares in liability, professional andmotor lines at terms it considered reasonable with risks and volatility that itwas assuming.
"Whilewe're always happy to write volatile lines and excess of loss treaties, itappears to us that, for the moment at least, this is a market that isunderpricing volatility in most lines. And we did not expand our bookmeaningfully in business introducing volatility to our portfolio," the CEOsaid.
Asthe company looks forward to the June 1 Florida renewals, Benchimol said"early indications are positive and there are signs the market isbottoming out in Florida as reinsurers draw a line in the sand following fourstraight renewals of price cuts." He said he does not expect to see priceincreases but certainly a slowdown in price reductions.
"Sowhile overall it is still a challenging market, given what we see both ininsurance and reinsurance markets, we are optimistic that in 2016 we mayapproach a floor in pricing for many lines in markets, with some disruptions creatingopportunities for better-positioned carriers."
AXISCapital's insurance segment reported underwriting income of
"The short answer is we arecontinuing to invest in improving our underwriting results in insurance,"the CEO said.
in its April 1report said that while prices at April 1 fell by "marginally less"than they did 12 months ago, suggesting a slowdown in the rate of pricedecline, it did not indicatethat the industry has reached a pricing floor.