July 3rd, 2009

Week’s Top Stories: June 27 - July 3, 2009

Posted at 1:00 AM ET

Prop-Cat Reinsurance Rate Increases Steady at July 1 Renewal: Property-catastrophe reinsurance rate increases were steady at the July 1, 2009 renewal. In the United States and Latin America, capacity was sufficient to meet demand. U.S. property-catastrophe reinsurance rates increased 15 percent year-over-year, in line with the trend from January to June. In Latin America, preliminary data varied by country, but upward pressure on pricing was offset by supply and local market competition to keep reinsurance rate increases contained. For the marine sector, rates were up 5 percent to 10 percent, based mostly on loss history and catastrophe exposure. With four major renewal periods covered this year, a sense of calm has emerged. The general reinsurance market is tepid, with a few hotspots based on region- or program-specific factors.

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Flooding in Central Europe: Heavy rainfall across the Central European region from June 22, 2009 to June 25, 2009 has caused severe flooding in several countries, including the Czech Republic, Austria, Poland, and Germany. The heavy rainfall is also reported to have prompted flood alerts for the Danube in the Slovak Republic and Hungary and has caused some flooding in Romania.

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Global Terror Update: Austria: Prior to September 11, 2001, terrorism risks were not considered to be a threat to Austria’s population or industries and tended not to be excluded in primary insurance policies.

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Florida Renewal up 15%, Follows the Global Trend: Property-catastrophe reinsurance rates increased by 15 percent at the Florida-centric June 1, 2009 renewal — compared to a 15 percent decline a year ago. Capacity was more limited than in recent years — however, still adequate to complete renewals. Though the ultimate result was higher than the 10 percent to 14 percent change for U.S. national reinsurers at April 1, 2009, the intricacies of the Florida market render it directionally consistent with the overall rate trend for this year. Constraints on capital have pushed risk-transfer pricing higher, but shortages were not so severe that rates spiked as they did in 2006.

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Yemenia Plane Crash, Indian Ocean: A Yemenia plane carrying 153 passengers and crew on an international flight crashed into the Indian Ocean as it approached its destination of the Comoros Islands in bad weather, according to airline officials. Reports said the aircraft was carrying 142 passengers and eleven crew members. The Airbus 310-300, operated by Yemenia, was flying the final leg of a flight taking passengers from Paris and Marseille to Comoros via Sanaa in Yemen. The plane was flying to Moroni, capital of Grande Comore, the main island of the archipelago, and reports said the jet went down around 10 kilometers (6 miles) off Comoros.

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Most Popular Keyword: TBD

And, you may have missed …

Freight Train Explosion, Italy: An Italian freight train carrying liquefied petroleum gas derailed just before midnight local time (23:00 BST), causing an explosion that engulfed several houses in the Tuscan coastal city of Viareggio, located to the northwest of Pisa in northern Italy. The freight train was en route from the port of La Spezia to its final destination in Pisa.

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