A surplus of reinsurance capacity kept Janaury 1 renewals down, according to local reinsurers.

Kevin O'Donnell, president of Renaissance Reinsurance Ltd., and Conan Ward, CEO of Validus Re, also indicated yesterday that that they do not see any change to harder prices in their market segments in the short-term.

They were speaking at a Bank of America Merrill Lynch Reinsurance Renewals conference held yesterday, according to a report by P&C National Underwriter.

The report showed that insurers who delayed their reinsurance purchases did not get any notable late bargains from disciplined reinsurance underwriters, but soft pricing continued for January 1 renewals and remains in place for the foreseeable future.

Mr. O'Donnell said he saw no trend of property reinsurers hesitating to deploy all of their capacity in January in anticipation of harder prices later in the year.

"I didn't get the sense that there were people holding capacity back in hopes that we're going to see a hardening market," he said.

Earlier in the call, Michael Sapnar, chief underwriting officer of domestic operations for Transatlantic Holdings in New York, who presented ten things for listeners to know about the casualty market, highlighted one item on the list – new excess-layer casualty insurance capacity that came into the US and Bermuda in 2009 – as a development that "didn't help rates".

Mr. Sapnar said the new capacity that arrived over the past 18 months was completely "comprised of former AIG (American International Group) people or designed to take advantage of AIG issues".

The new excess casualty players "did not even meet half of their aggregate premium targets", Mr. Sapnar claimed, and attributed their failure to do so to good underwriting at the new companies in some cases, inadequate financial-strength ratings in others, and activities of incumbent markets that fought to keep business.

Mr. O'Donnell and Mr. Ward also commented on waning demand during their presentations.

Mr. O'Donnell, speaking about the property market, said strong cedant balance sheets, together with a "reduction in uncertainty and fear, (had) led to...significant reduction in (reinsurance) limits (purchased) by some large buyers".

Overall, he described property market renewals as "softening but still satisfactory", and cited publicly-available figures on US property catastrophe prices, putting them in the range of five to ten percent down.

Mr. Ward, who spoke about several specialty markets, including marine, energy, aviation and terrorism, highlighted the Gulf of Mexico energy sector wind damage insurance market as a place where both insurers and reinsurers have seen lower demand.

He attributed low levels of insurance to take-ups to tough stances taken by insurers in 2009 on prices and terms.

He said insurer discipline could mean that only about half of aggregate limits for wind exposure that were put into the insurance and reinsurance markets in 2008 will be in those markets in 2010.

Specifically, he said wind aggregates, which totaled $10 to $11 billion in 2008, would only be about $5.5 to $6 billion in 2010, with reinsurers covering 30 to 40 percent of total aggregates.