Figure 3

This figure shows the ratio of reinsurance premiums to expected loss by year (1980-1994) and by exceedence probability (probability of incurring a loss) decile.  It shows that prices have generally increased over time.  It also shows that prices have been higher for insurance of events where the probability of incurring a loss is low-particularly for the lowest exceedence decile.   For this decile, prices have been at least 5 times has large as expected losses since 1985, and they were nearly 30 times expected losses in 1994.  In contrast, the price for the highest exceedence decile never approached 5 times expected losses