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.

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Employers Liability/General Casualty - United Kingdom:

Reinsurance rate reductions were achieved on accounts with good performance. Those accounts with a notable PPO exposure and where reinsurance purchasing was at a higher attachment point were subjected to higher volatility loadings.

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David Lewin, Managing Director
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Background

The September 2010 issue of this series covered the controversial topic of auditors’ liability, and subsequently the September 2011 issue referred to the Consolidated Text of the Accounts Audit Act of July 1, approved by Royal Legislative Decree 1/2011 (RLD 1/2011), which abrogated the Accounts Audit Act (AAA) then in force. The RLD 1/2011 has been in force since July 3, 2011. The following provides an update to the September 2010 report and expands on the issue.

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David Lewin, Managing Director
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Introduction

A new regulation, the act on the Financial Liability of Public Servants for the Grave Violation of the Law (FLPS), may impact the Polish insurance market in the next few years. FLPS concerns the financial liability of public servants towards the State Treasury, the territorial government unit or other legal persons that bear liability for damages inflicted while exercising public authority. The Polish Parliament passed the act on January 20, 2011, and it became effective on May 17, 2011.

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Directors & Officers

D&O reinsurance rates were flat slightly at the January 1, 2012, renewal, despite small rate increases on some primary and lower excess insurance layers in recent months. Pricing was more competitive on higher excess insurance layers and is down approximately 10 percent year over year. For 2012 modest price increases in primary and first excess insurance layers are likely, especially in light of rate changes over the past few months. Rate decreases on excess insurance layers will be smaller, resulting in a net flattening. Small and medium-sized businesses are likely to follow the same trajectory.

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Professional indemnity insurance original pricing remains stable, with occasional rate increases where premiums have been maintained on a reduced fee income or on those accounts impacted by adverse loss experience.

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David Lewin, Managing Director

Introduction

Directors and officers (D&O) insurance has grown steadily in popularity since it was introduced in Poland 15 years ago. Accompanied by a rise in risk-aware corporate leadership, D&O insurance has evolved from an unknown product in the mid-1990s to a near necessity during periods of economic instability.

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There are a handful of casualty placements in Australia/New Zealand at the July 1 renewal. General casualty rates were flat. Most reinsurers seemed either reluctant or were instructed by their boards to not give up any rate levels. Renewals proceeded on a case by case basis. Where good claims experience and change in exposure mix justified it, reinsurers accepted rate reductions of up to 5 percent.

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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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Guy Carpenter & Company announced that Jonathan Stephenson has been appointed Managing Director of Guy Carpenter’s Australia operations and CEO of the firm’s Pacific region, effective July 1, 2011.

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