BC-REINSURANCE/ (UPDATE 1, REFILE)

REFILE-UPDATE 1-Reinsurance prices fall in Jan renewals - broker

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+ U.S. catastrophe insurance prices fall 6 percent - broker

+ Fall reflects tough competition, robust capital - broker (Adds comparison with earlier Willis, Aon Benfield surveys)

LONDON, Jan 4 (Reuters) - Global catastrophe reinsurance prices were weaker as policies came up for renewal on Jan. 1, weighed by stiff competition, according to a survey by reinsurance broker Guy Carpenter.

The cost of reinsuring against natural catastrophe losses fell by 6 percent in the U.S. and as much as 5 percent in mainland Europe, Guy Carpenter said, while rates in Britain were down by between 5 and 10 percent.

The broker, part of U.S. financial services group Marsh & McLennan, said the decline reflected intense competition between reinsurers, whose capital reserves have been bolstered by rebounding financial markets and low claims volumes last year.

"A combination of factors, including the rally in global financial markets, relatively low catastrophe losses in 2009, and lingering recessionary effects on demand, has resulted in an excess of supply and heightened competition at this year's January 1 renewal," Guy Carpenter Global Head of Business Intelligence Chris Klein said.

Analysts at Oriel Securities in London said the decline in prices was broadly in line with market expectations.

"The absence of catastrophe losses combined with a strong recovery in industry capital was widely expected to drive softer (catastrophe) rates in particular, and that is indeed what has happened," they wrote in a note.

The Guy Carpenter survey is consistent with reports issued last week by rival brokers Willis Re and Aon Benfield, which highlighted a softening of reinsurance prices in the run-up to Jan. 1 due to a combination of strong reinsurer capital and subdued demand for reinsurance cover. (Reporting by Myles Neligan)

REUTERS