February 9th, 2009

Modest ROL Increases at 1/1 for Europe

Posted at 12:10 AM ET

European rates rose on average from 0 percent to 10 percent on a risk-adjusted basis. Though it produced some headlines, Windstorm Emma did not yield substantial insured losses and had only a limited effect on pricing. Instead, rate on line (ROL) changes came from programs with increased exposure to the Northwest European wind peril and the availability of limited capacity in the region. Some programs were completed late and at relatively higher rates. Despite this limited capacity in the marketplace, reinsurers showed little interest in providing new layers, due to capital markets constraints throughout the year. Retentions and structures were relatively static, with some cedents looking to buy additional capacity at reasonable prices. For programs where Northwest European wind was not an issue, renewals were flatter.

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