As reinsurers met in Monte Carlo this week S&P reinsurance analyst Mark Coleman said the decision may well be the type of event which could prompt a premium hike at a time when the expectations are rates will be under pressure across the board at the Januray1 renewals.

Mr Colman said despite the worst level of catastrophe claims in the first half of a year for over a decade it would take a major catastrophe of around the $50 billion market or a series of major losses which impacted the reinsurance market to that level to see rates start to harden.

“However the casualty area of a concern for the reinsurers and if there was a major increase in liability exposures in the US on the marine and energy side it could be enough to affect rates,” he added.

He said there was capacity in abundance within the reinsurance sector the threat of a huge leap in the liabilities faced by the energy market for US pollution spill might trigger an exodus from marine and energy market or tough new limits in terms of the exposure they were willing to assume.

He said: “Property wise the market is in good shape and the level of capitalisation has seen some $64 billion replenished in 2009 following the loss of around $54 billion mainly n asset values in 2008. However where they remain concern is in the casualty side because of the longer tail nature of the market.”

However the potential implementation of the Solvency II regime in Europe is not expected to have an effect on the appetite for the more volatile areas of the market such as marine and energy or natural catastrophe covers.

“The reinsurers are already using sophisticated internal models to management underwriting exposures and we do not see those models changing in any great deal with the implementation of solvency II,” he added. “We believe the reinsurers are aware of the levels of solvency they require and are already well capitalised over and above the requirements for their current ratings.”