Despite ample capacity, CEE was one of the world’s few regions where experts registered substantial, sometimes low double-digit rate increases. However, harder pricing was limited to segments and layers affected by nat cat losses over 2010. “Based on preliminary results, pricing of loss-affected layers increased by approximately 15%”, Aon Benfield stated. Hannover Re’s Alexander Guerassimenko also estimated the average rate increase for loss-affected cat programmes at around 15%. According to him, especially noticeable increases – as much as 30% – were registered for Polish cat programmes.
In its renewals report Guy Carpenter provided a detailed, layer-by-layer, analysis of regional pricing developments: “Catastrophe excess of loss rates on line were generally down 5% to 10% for loss-free programs, with those affected by losses up by as much as 20% to 30% at the lowest layers”, – exactly the layers that were most affected by weather-related losses. “Middle layers were up around 7.5%, and top layers were flat or slightly reduced. Per risk working layers were also up 5% to 10%, generally as a result of either losses and/or increased exposure. Higher layers were flat to down”.
Rates for non-cat/loss-free programmes tended to reflect pricing developments in the primary market and capacity increases. “Risk excess of loss rates in the region decreased slightly or remained unchanged, depending on the loss experience. Motor third party liability programmes have seen slight decrease as well”, Aon Benfield stated. According to Hannover Re’s Alexander Guerassimenko, loss-free segments registered either flat pricing dynamics or a softening of 5-10%, like in the case of CEE civil and professional liability programmes.
An average reduction across the programmes reached approximately 5%, Guy Carpenter’s Hamish Dowlen told our blog. Aon Benfield registered an average softening of around 2% on loss-free layers and a softening of approximately 3% across the whole regional market.
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