The reinsurance industry is still under pressure from low prices, a top executive said this week.

Aspen Re chief underwriting officer Emil Issavi added the year started with a “benign” natural catastrophe environment, a more stable economy and stable inflation.

“The industry, however, continues to suffer from the low interest rate environment and excess capital,” Mr Issavi said in a conference call hosted by Macquarie Securities to discuss reinsurance renewals.

“The pricing challenges created by this excess capital continued during January 1 renewals, although the impact differed by line of business and geography.

“While there was a slowing of price decreases in certain lines, pricing in many areas of business was disappointing.”

Mr Issavi added, however: “Terms and conditions generally remained reasonably stable, mitigating some of the negative effect from rate movement.

“In addition, clients continued their consolidation of reinsurance panels, choosing reinsurers capable of delivering a broad range of products with local distribution reach.”

Mr Issavi said that relative pricing for most lines of business had held up better in the US than internationally, and even loss-affected portfolios had seen positive movements.

He added: “There are signs of a market that has maintained some discipline despite the soft conditions. In addition, original underwriting rates generally remained more stable, allowing reinsurers to benefit when participating on a pro-rata basis.

“In these cases the commissions increased on better programmes but the industry showed discipline and stability compared to prior soft markets. January 1 also saw greater requests for multiyear deals, potentially signalling the bottom of the market for certain lines.”

Mr Issavi was speaking in a general discussion about the state of the industry.

He said that property catastrophe did better than last year’s renewal season, with rates falling by around five to ten per cent.

The rates in the US generally fell by between 2.5 and 7.5 per cent while the international market dropped by five to 15 per cent.

Mr Issavi said January was a bigger renewal date for Europe than in the rest of the world and that terms and conditions had remained “broadly stable”.

He added: “The market appears to have held some ground despite coming off three years without a major catastrophe loss.

“Additionally, the renewal season saw some higher retentions but overall this does not appear to be a significant trend and was largely consistent with expiring levels.”

In the property per risk and property proportional segments in the US, per risk rate changes ranged from flat to down five per cent and the market saw pressure on treaty terms and conditions, although the market pushed back successfully in many instances where it felt terms and conditions were unreasonable.

Internationally, rates declined by between five and 15 per cent on loss-free portfolios, with the largest rate declines registered in Europe, followed by Latin America and Asia.

Mr Issavi said: “In all regions, main terms and conditions generally remained in line with expiring ones. Portfolios with risk losses had more difficult placements and were less affected by negative rate movements.”

In property proportional, rates were generally down, but appeared to be levelling off, with larger drops in outside the US.

Mr Issavi said: “As expected, the January renewals saw continued pressure on price. Terms and buying habits in general did not see significant changes.

“Although there was broad pressure on most lines of business there was little that occurred outside of our expectations.”