The Scandinavian market was characterized by increased capacity provided by several reinsurers. Soft market conditions prevailed and rate changes were generally flat to declining. Loss-free cat excess of loss lines were flat to declining 5 percent. Property Risk business without losses was flat to down 5 percent. However, Property Risk business with losses, experienced rate changes that were flat to increasing 5 percent.

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The renewals season was relatively stable in the CEE countries, with very little change in excess of loss pricing (XOL) on risks without losses. Average rates for XOL property cat risks with losses rose by 5 percent to 10 percent. Average rates for XOL Motor Liability and General Liability risks with losses were generally flat to 5 percent higher. Risk XOL business was under heavy pricing pressure due to the strong availability of capacity in the market and the generally benign loss experience of recent years. For catastrophe excess of loss lines there was pressure from the market to increase retentions as frequency has increased.

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The January 2010 renewal season in France was characterized by stability, available capacity, low loss activity and strong competition. The lines where capacity was limited were credit and medical malpractice, the later impacted by distressed/heavy risks. Excess of loss (XOL) property cat business with losses showed average rate increases of 10 percent mainly on the low layers (hit by Windstorm Klaus), but changes were flat on the top layers. Change was also flat for business with no losses. XOL property risk business showed no changes for programs with losses and an average rate decrease of 5 percent for programs without losses. Cedents continue to move retention levels to keep reinsurance spend flat. No model changes occurred during the year, but Klaus did generate model recalibration activity.

Asia Pacific buyers are generally not affected by the same degree of falling original demand that has been experienced in Europe and North America. But reinsurance price competition is still strong and buyers with a clean record were able to secure reductions. Overall the price picture was mixed, because against the background of a market that is softening, there was significant loss activity in several territories during 2009, particularly in the Philippines and Indonesia. Buyers who received reinsurance recoveries in 2009 faced increases at renewal. In Australia an early renewal saw clients achieving risk adjusted rate reductions of up to 10 percent.

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Aaron Bueler, Managing Director and Emil Metropoulos, Senior Vice President 

With both the indemnity and medical severity components continuing to rise, the cost of workers compensation insurance remains a top concern for all employers, despite favorable trends in reduced claim frequency. The recession has further put pressure on wages that are being outpaced by indemnity inflation. Workers compensation medical inflation also continues to grow faster than the Medical Consumer Price Index. Despite these trends, primary workers compensation writers remained competitive by either keeping rates flat or granting reductions up to 5 percent on premium rates. Insurers attempted to write new business to offset lost premium caused by exposure decreases across their portfolios.

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Property lines price changes were flat in the Portugal market. Motor and Marine excess of loss lines without losses were notable for their average price increases in a range from 15 percent to 25 percent. Earned premium income is still decreasing due to the economic recession. Capacity is readily available and consolidation is increasing the already high market concentration and competitiveness.

Average rate changes at the Spain renewals encompassed a wide range, from increases of 25 percent to declines of 10 percent. Some lines experienced no changes while the property line saw most of the significant rate changes. Excess of loss (XOL) Property business with losses showed average rate increases of 25 percent that mainly resulted from Windstorm Klaus effects. Average rates declined slightly on Property Risk business with losses and declined from 4 percent to 10 percent on Property Risk business without losses. Primary insurers increased retentions on XOL Property per event programs to reduce the impact of the rate increases. Marine rates showed little change from the large increases of the prior year’s renewal. Capacity problems were not an issue in this highly competitive market.

Simon Hayes, Managing Director
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The 2008-2009 global financial crisis had a significant impact on insurers in the engineering and construction sector. Many large and small Contractors All Risk (CAR)/Erection All Risk (EAR) single projects around the world were either cancelled or suspended due to lack of available financing. These developments have caused insurers’ income from construction projects to shrink. Insurers see a need to expand into other classes, such as annuals, power and breakdown.

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The strengthening Australian dollar against other key currencies (GBP, Euro, USD) did not dampen available capacity. The market was characterized by a more than adequate supply for all lines of Australian/New Zealand reinsurance business. Average rate changes for loss free lines of business were flat or declined 10 percent. Major renewals tended to be in the market early with subsequent early completion of placement.

Average rates on line remained stable on exposures that generally increased in size at the renewal season in the Benelux countries (Belgium, Netherlands, Luxembourg). Buyers, cognizant of the emerging capital standards around Solvency II, often increased their purchased capacity.

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