The upward climb in property insurance rates has suddenlyreversed course thanks to abundant capacity and continued lightcatastrophe losses, says Willis North America.

The insurance broker, a unit of Willis Group Holdings, revisedits property rates forecast for the second half of this yearpredicting prices will decrease by 5-10 percent for non-catastropheexposed accounts and remain flat or decrease up to 5 percent forcatastrophe accounts.

Willis says its previous report, published in April, found ratesfor catastrophe exposed accounts were flat or increasing by 5percent.

David Finnis, National Property Practice Leader at Willis NorthAmerica, says increased capacity that was not there a few monthsago accounts for the change in course. Rates will continue theirdownward slide unless there is a large loss event, he adds.However, this scenario does not apply to accounts affected bySuperstorm Sandy, especially where flood limits are reduced orrestructured.

The report notes several new players in themarketplace—Berkshire Hathaway Specialty and two China insurers,plus two new broker facilities—Aon/Berkshire Hathaway and WillisGlobal 360.

The report says insurers renewing their reinsurance treaties in2013 for property risks are seeing decreases of 10-15 percentbefore their July renewals. Those with separate reinsuranceprograms for Florida Catastrophe risk see decreases of 15-20percent due to the low level of losses since 2005.

Outside of the EF5 tornado that hit Moore, Okla., loss activityfor 2013 has been light, producing profits for underwriters andcombined ratios between 75 and 85 for manyinsurers.

A report released earlier this week by Guy Carpenter, underscored theimpact financial investors are having on the insurance marketplace,pouring money into alternative risk vehicles such as catastrophebonds, side cars and collateralized reinsurance. The effect isdampening price increases for property risks and that isspilling-over to some casualty accounts.