Engineering reinsurance pricing was flat at the January 1, 2012, reinsurance renewal - for general treaty, catastrophe excess of loss and per risk. For loss-affected programs, the losses realized drove pricing changes.
In the primary sector, engineering rates were flat to down 10 percent in 2011. There was some merger activity in the space. For 2012, look for stability in the oil and gas sectors of engineering; although general construction and infrastructure are expected to be weaker.
General treaty losses for the engineering class came in a bit over USD1.5 billion in 2011 - not enough to increase subject base exposure relative to premium (flat to down 10 percent). Pricing for catastrophe excess of loss (loss-free programs) was flat, with loss-affected program pricing varying with the actual losses sustained. Plenty of reinsurance capacity was available.
Per risk working layer program renewals were flat for the sector. High risk excess programs could impact engineering catastrophe pricing, depending on the outcome of the 2011 disasters in Thailand.
Proportional treating pricing was generally flat at the renewal, with no real pressure on ceding commissions, profit commissions or overrides.