March 4th, 2010

January Renewal in Austria: Rates Rise

Posted at 10:00 AM ET

Austria saw prices increase at the January 2010 renewal as catastrophe capacity was less available due to further increases in loss frequency in 2009 following the poor performance of years 2006 through 2008. Average Rate on Line increases of 20 percent were seen for excess of loss cat risks with losses, and average increases of 5 percent for those with no losses.

The reinsurance market is watching closely for any further loss activity in 2010. Sizeable losses in 2010 will put enormous pressure on retention levels and available capacity for lower layers and aggregate excess of loss programs. The Austrian market continues to be extremely conservative. Despite high rates on line on the lower level cat business, insurers are generally unwilling to increase retentions.

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