A battle to maintain market share at the 1 July renewals kept up pricing pressure on US property catastrophe reinsurance business, according to the major brokers.
The 1 July renewal is a pivotal date for some large US nationwide and international property cat accounts.
Willis Re said loss-free US cat programmes outside the Florida market typically priced down by 10-20 percent at the renewals - slightly less than the 15-25 percent decline noted for Florida cat business.
Meanwhile, those accounts hit by cat losses - including Superstorm Sandy last autumn - were in the range of down 5 percent to up 5 percent.
However, Guy Carpenter said that loss-free US property catastrophe programmes had obtained some of the largest premium reductions achieved so far this year at the 1 July. The broker reiterated its view that capital markets reinsurance pricing has decoupled from levels set by the traditional market this year - in turn pulling traditional rates down.
"The excess capital in the market and, more importantly, the behaviour of that capital, has encouraged a dramatic shift that triggered downward pricing in the traditional market in order to remain competitive," said Lara Mowery, Guy Carpenter's global head of property specialty.
Although the impact of convergence was less dramatic elsewhere, general downward pressure on rates was seen in property business in other regions and across certain casualty lines, according to Guy Carpenter's global head of business intelligence David Flandro.
Absent a major cat loss, this trend was set to continue into January 2014, he added.
Guy Carpenter estimated that convergence capital now accounts for about $45bn of global property catastrophe limit or 14 percent of the market.
Outside the US, Willis Re said that rates were down 5 to 8 percent on UK cat business unaffected by losses.
In Australia, loss-free cat accounts renewed flat to down 5 percent, with loss-affected business flat to up 5 percent, and pro rata commissions flat to up 2 percent. Australian cedants were buying increased sideways cover to meet new regulatory demands (see Suncorp story).