March 12th, 2010

Italy Property Renewals

Posted at 12:00 PM ET

The Italian market was characterized by reinsurers who were not driven to quote aggressively, but then followed final terms. Average rate changes spanned a wide range from flat to up to 20 percent higher. Excess of loss (XOL) business without losses was generally flat, the exception being bond and credit coverage, which increased by 5 percent. Rate changes for XOL business with losses ranged from flat to increases of 15 percent for marine, 10 percent for cat and 5 percent for risk business and general third party liability. Motor third party liability business with losses experienced large average increases for exposures below USD2.5 million in a range of 15 percent to 20 percent. Exposures exceeding USD2.5 million showed rate increases of 5 percent. Reinsurance budgets appeared to be unchanged from the prior years and increased retention levels were correlated with rate increases. Combined ratios for primary markets generally increased and were not impacted by reinsurance programs as the loss portfolio primarily reflected small losses. (The L’Aquila earthquake was an exception.) Facultative business has also become a more important service offering in the Italian market.

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