Insurance broker Willis Group Holdings Ltd. said yesterday that its annual review of reinsurance found that rates for property and casualty exposures were flat or falling, suggesting that prices will hold in most business and consumer insurance policies in 2007.

Willis Group, with offices in New York and London, said that reinsurance rates declined five percent to 10 percent in some parts of the world.

Reinsurance is purchased by insurance companies to help spread policy risk.

The exception, Willis Group said, was in areas in the United States along the East and Gulf coasts where property insurance rates have risen, especially for policies that cover wind damages. In some cases, reinsurance rates are up 40 percent, it said.

The report stated: ?Rates for both property and casualty exposures are generally flat or falling modestly. In Europe (with the exception of wind exposed Northern European multi-territory covers where rates are firm), Asia, Australia, Latin America and those areas and classes of business of the United States not prone to natural catastrophes, rates are flat or have fallen by five percent to 10 percent.

?The major exception to this trend is United States property business, where the insurer has significant East Coast or Gulf Coast wind-exposed business. This business is experiencing rate increases.

?In this market, there are five macro factors at play. First, reinsurers have sought to bring January renewals of nationwide and/or critical cat accounts in line with the mid-year 2006 pricing levels with cedants experiencing rate increases of around 40 percent.

?Second, reinsurance pricing is reflecting the perception of increased volatility that is embedded in the latest property catastrophe models. Third, reinsurers are trying to recoup losses from the catastrophes of 2005.

?Fourth, reinsurers and their investors also have a new appreciation for the insured values and the resulting catastrophe exposures in the Northeast coast of the United States ? the third ?peak zone?. Finally, there is simply not enough retrocession capacity for reinsurers to spread their catastrophe risks. Reinsurers, as a consequence, require greater returns to compensate for this increased exposure.?