Reinsurance rates on line (ROL) fell in Austria at the January 1, 2011 renewal, reversing a trend from the year before. While ROLs were flat to up 7.5 percent for loss-free programs at the beginning of 2010, cedents were able to attain flat pricing to decreases of 5 percent in 2011.
With no major losses in 2010, ample capacity and no major changes to reinsurance structures, rates were flat to down slightly this year. Subject base exposure is up approximately 4 percent, which is roughly in line with rate changes. Solvency II is having a gradual effect on the amount of capacity purchased by cedents for natural catastrophe events, but the changes have not been significant. There were generally no changes to proportional treaties, though capacity increased slightly year over year as a result of solid 2010 results.
Primary insurance rates for natural peril risks increased 10 percent to 20 percent year over year in Austria, with fire and motor staying stable. There were no significant changes to industry loss ratios. Austrian carriers have been expanding and consolidating their merger and acquisition activities, mostly in Central and Eastern Europe. The outlook for 2011 is stable - consistent with 2010.