Australia & New Zealand
The handful of casualty placements in Australia/New Zealand at the July 1, 2012, renewal continued to operate against a backdrop of a benign claims environment. As a result, reinsurers were constrained in their efforts to increase rates to offset their declines in investment interest income. General casualty lines renewed within a range of down 4 percent to up 3 percent, with reinsurers seeking rate increases of 3 percent to 5 percent.
Professional lines renewals were flat to down 3 percent. Primary rates maintained pace with inflation for general casualty but were flat to down for professional and specialty classes driven by abundant capacity. There was some reduction of reinsurance capacity from markets who had withdrawn from underwriting in the region due to property losses but this did not affect renewals that saw sufficient new markets to complete placements as required.
In Malaysia, programs that were loss free were at best flat and those that had claims into layer 1 had increases of up to 10 percent. Other lines of direct casualty business were still quite flat.
Most programs experienced pricing in a range of flat to down 5 percent. This was consistent with the trend seen during the January 1, 2012, renewal. In general, prices increased for lower layers and decreased for upper layers. On average, there was no significant difference in percentage movement across layers. There have been no major changes in capacity, terms and conditions and rates.