Benfield Sees Underlying Pressure at 2006 Reinsurance Renewals.

LONDON -- Last year's unprecedented catastrophe losses had an uneven impact on pricing and capacity at 2006 reinsurance renewals, according to a comprehensive report published today by Benfield, the world's leading independent reinsurance and risk intermediary.

Benfield's 82 page report, titled Swings and Roundabouts, finds that the hurricanes caused dramatic increases in reinsurance rates in the USA, particularly for Property Catastrophe business in loss-affected areas and in the non-Marine retrocession and Marine reinsurance markets. Elsewhere the hurricanes had a generally stabilizing influence, reversing the downward price trend.

"The immediate impact of the hurricane season fell short of the market changing event some expected," said Grahame Chilton, Chief Executive of Benfield. "However we believe that the market has changed. Continuing development of 2005 losses, recalibration of catastrophe models and the shrinking appetite for peak exposures are some of the factors which will exert further upward pressure on pricing."

Tighter outlook

Grahame Chilton continued, "Reinsurance capacity is likely to be significantly tighter for 1 July renewals and beyond and this is likely to lead to a general re-rating across global markets."

2006 renewal overview

According to the report, loss affected property catastrophe treaties in the USA experienced the most substantial price increases, of more than 100 percent in some cases. Loss-free property business in the USA was up 10-20 percent, compared with price falls of up to 20 percent in January 2005. In Latin America and Caribbean, Western Europe, Australia and Central and Eastern Europe there were swings from price decreases in 2005 to either flat or low double-digit growth.

A worldwide post-renewal survey of Benfield brokers conducted during the past two weeks found that cost was the primary concern for 33 percent of reinsurance customers, with security and ratings (27 percent) and coverage, terms & conditions (23 percent) also significant issues.

A full copy of the report can be viewed online at www.benfieldgroup.com/research. Printed copies can be obtained by contacting [e-mail].

Notes to Editors:

Benfield is the world's leading independent reinsurance and risk intermediary. Its customers include many of the world's major insurance and reinsurance companies as well as government entities and global corporations. Benfield operates from more than 30 locations worldwide. The company is listed on the London Stock Exchange under the ticker symbol BFD. www.benfieldgroup.com