Reinsurance market conditions remain in buyers’ favour as the industry cycle continues to come under “extreme strain”, according to Willis Re’s latest First View renewals report.

The report says Indian property rates, measured on a catastrophe loss-free basis, have fallen 20-25%, while Japan earthquake rates dropped 10-15%.

Rates in the US declined 10-15% and in South Korea they fell 5-10%.

The strain has triggered an industry-wide sense of urgency, forcing reinsurers to review their strategies and business models.

“There are no signs the current tide of falling rates and widening terms and conditions will be reversed,” Willis Re CEO John Cavanagh said.

“Everyone should be broadening their horizons. Diversification is now the key competitive advantage in this increasingly consolidated and converged reinsurance industry, and the ability to deliver a differentiated service offering is critical.”

Even insurance-linked securities (ILS) are not spared, as returns continue to slide and fees come under downward pressure.

“ILS fund managers that are evolving into more traditional reinsurer models… currently appear to be best placed to trade through this difficult period,” the report says. “They can manage investors and access business more effectively.”