LONDON, July 1 Reinsurance broker Willis Re said on Tuesday it expected reinsurance rates to come under further pressure as "excess capital continues to chase muted demand".
The trend has been compounded by "benign" loss activity in the first half of the year and continues the trends seen at reinsurance renewal points in January and April, it added in its '1st View Renewals Report'.
"The tentacles of the softening market are spreading far and wide, with no immediate signs of relief. We've seen muted demand throughout 2014 and market dynamics are unlikely to change for some time to come," said Willis Chief Executive John Cavanagh.
Cavanagh said the current market position was "increasingly challenging" for reinsurers.
"Below average loss ratios in the first half of 2014 and reasonably adequate reserving positions mean that, barring any major underwriting or investment losses in the coming months, we will see another year of reasonable returns. This places further pressure on rating levels for 2015," he added. (Reporting by Simon Jessop; editing by Nishant Kumar)