According to many insured car holders in Poland, insurers have been underestimating compensation for losses, and the majority of auto insurance cases in Poland have been settled for amounts far below the actual costs of restitution. The most frequent reason is that the value of a loss has been determined based on the prices of used spare parts rather than new ones.

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The Insurance Contract Act (Versicherungsvertragsgesetz, VVG) contains provisions about risk exclusions and incidental obligations. A risk exclusion means the insurer does not provide insurance cover for a specified excluded risk, and in cases of an incidental obligation, the policyholder loses insurance cover if he/she does not observe the specified incidental obligation.

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United Kingdom:

Reinsurance rates continued to harden following the reduction in excess of loss capacity available, as evidenced in the January 1, 2012, renewals, with periodical payment orders (PPOs) an increasing concern for reinsurers. Rate increases were targeted at the layers excess of GBP5 million, with increases in the 20 percent to 30 percent range the norm rather than the exception.

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UK Motor

Rate increases were higher than in recent years at the January 1, 2012, reinsurance renewal for UK motor, due in part to primary market dynamics.

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Automobile and General Liability

Primary insurance rates in the commercial sectors have stabilized with underlying exposure stabilizing as well. The majority of general and automobile liability renewals renewed flat or with rate increases in the 1 percent to 5 percent range. Some favorable primary risks, however, continue to experience rate decreases in the single digits. The overall impact has been a slight increase in liability subject premiums in the low single digits. Underwriters of medium to large US liability businesses have been requiring more data than in the past. They are acquiring additional details on loss data and trends, safety reports and risk management practices. Direct commercial liability markets continue to show general improvement in their profitability as underwriting practices improve and increased portfolio analytics, such as predictive modeling, continue to be implemented.

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Reinsurance rates generally were flat year over year at the January 1, 2012, renewal. Motor was the lone exception, with reinsurance rates up 5 percent from a year ago. For 2012 the outlook is relatively stable. Developments in the motor business, which accounts for 50 percent of property and casualty premiums, also have led to a broader improvement in the insurance industry throughout the country.

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Motor

UK:

Original rates continued to increase, particularly in the private car sector, where rates are moving upward at an average rate of 1 percent to 2 percent per month. Movements in commercial rates are less pronounced, but year on year rate movements are increasing in the range of 5 percent to 10 percent.

Movements in the original rates, combined with substantial excess capacity in the reinsurance market, mean that reinsurance rates were generally flat. Accounts with good loss experience saw reductions of up to 5 percent.

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Reinsurance rate changes varied widely for UK motor at the January 1, 2011 renewal. The most favorable rates maintained expiring rates on income, with allowances for underlying rate increases. There were some significant increases, however, with rate-adjusted costs for reinsurance approaching 50 percent. The cedents attracting the most favorable pricing were large, well-balanced accounts with diversified distribution and long-term viability. They also placed motor as part of a motor and liability program, had histories of genuine relationship management, demonstrated claims-handling expertise and paid a significant premium into the market.

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