Guy Carpenter & Company, LLC, the leading global risk and reinsurance specialist, today announced that its Instrat® quantitative and risk modeling group has introduced a new Pan Central and Eastern European (CEE) flood model. The flood model is the first developed by Guy Carpenter to cover multiple countries, effectively addressing the issue of between-country correlation of flooding events.
Hamish Dowlen, Senior Vice President
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2008 Reinsurance Market Position
The pricing of Polish catastrophe business is still quite competitive, with substantial capacity available from all reinsurance markets (worldwide). Since there have been no significant catastrophe losses since 2001, a relatively benign loss experience in recent years has put pressure on pricing. Carriers are generally purchasing protection up to high return periods. Retention levels have nonetheless increased for some larger buyers. As a result, Windstorm Kyrill losses remained within quite a few insurers’ retentions.
Hamish Dowlen, Senior Vice President
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2008 Reinsurance Market Position
The 2006 “weight of snow” losses had an effect on the 2006/2007 renewal season, as many reinsurers had not previously considered this peril a serious risk for catastrophe programs. Due to the difficulty in ascertaining the duration of a weight of snow event, a number of programs abandoned an hours clause for this peril and introduced an annual aggregate feature instead. Loss-affected layers experienced modest price increases in most cases, but otherwise prices were stable or slightly reduced for the majority of companies.
Hamish Dowlen, Senior Vice President
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2008 Reinsurance Market Position
Little catastrophe reinsurance is purchased locally in Slovakia, with non-life premium in 2007 at USD1.3 billion. Larger international programs bought outside Slovakia protect the top seven non-life companies. But, reinsurers pricing exposures within group programs tend to view catastrophe business from Slovakia favorably. While reinsurers are aware of the heavy flood exposure, past losses have been modest and sometimes surprisingly low. This has kept pricing competitive and capacity plentiful.
Hamish Dowlen, Senior Vice President
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2008 Reinsurance Market Position
The Romanian market is currently awaiting the implementation of an earthquake and flood pool. This is expected to reduce insurers’ first-loss exposure to these perils for residential risks. Until the pool is implemented, a number of local catastrophe programs can be bought.
Hamish Dowlen, Senior Vice President
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2008 Reinsurance Market Position
The Slovenian market differs from most other countries in the Central and Eastern European (CEE) region. It is dominated by two large insurance groups, Sava and Triglav. Both have active reinsurance companies writing business across Europe and around the world. These reinsurance companies soak up a large proportion of the domestic exposures, though they purchase external retrocession protection on parts of their domestic accounts.
Earthquake exposures are traditionally protected on a proportional basis. Prices have declined slightly for excess of loss programs.
Hamish Dowlen, Senior Vice President
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2008 Reinsurance Market Position
The storm peril is covered universally for full value in household policies, as well as in most commercial and industrial policies. Catastrophe capacity is readily available at attractive prices for the Hungarian market, and another year of low losses in 2007 resulted in some further price reductions for local programs (though they were small).
Hamish Dowlen, Senior Vice President
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2008 Reinsurance Market Position
The Czech Republic has sufficient excess of loss catastrophe capacity available. Competition was quite strong during the renewal, although the reinsurance market remained harder than had been expected originally. The purchase of one major group program for the entire Central and Eastern European (CEE) region was transferred to Prague for the 2008 renewal, resulting in an increased focus on the Czech catastrophe market. However, two of the largest insurers in the market continue to be protected against natural perils within their parent companies’ group programs, which are purchased from outside the Czech Republic. In the non-life line, the top five companies comprise 85 percent of the market.
